Confidence about potential approval of the first bitcoin exchange-trade fund (ETF) in the U.S. by the Securities and Exchange Commission has propelled the price of the cryptocurrency to record levels, pushing it past gold for the first time ever.
Final decision on the bitcoin ETF filing, made almost four years ago, by investors Cameron and Tyler Winklevoss is expected March 11.
Many watchers appear optimistic that this filing would be approved by the US securities regulator. This is reflected in the recent rise of the price of bitcoin to all-time high levels.
The price of the cryptocurrency jumped about 5 percent on Friday, March 3, to reach an all-time level. It was traded at $1,298 on Bitstamp on the day, according to CNBC.
“There’s one catalyst at the moment and that is the expectation that the Winklevoss Trust will be approved on the 11th of March. That’s the only game in town.” Daniel Masters, portfolio manager at Global Advisors Bitcoin Investment Program, told CNBC.
The increasingly popular cryptocurrency, whose price has risen more than 30 percent this year, had on Thursday surpassed gold for the first time ever.
The Bitcoin Price Index of CoinDesk showed the virtual currency was being sold for $1,271 on the evening of Thursday March 2. However, the price of an ounce of gold was at $1,235 on the day, according to the precious metals retailer APMEX.
Bitcoin was created by a software developer working under the pseudonym Satoshi Nakamoto. It is a digital and decentralized currency, different from regular printed money. There is a fixed number of bitcoin that can ever be in circulation. It is originally obtained through a process known as mining, which involves solving mathematical puzzles at set intervals.
The virtual currency is especially popular because it allows people to move money around the world quickly. It allows users cut down on transfer costs and, most importantly for some, to carry out anonymous transactions.
Experts believe the approval of what would be the first US bitcoin ETF will enhance the liquidity of the cryptocurrency. Bitcoin wallet KeepKey founder and CEO Darin Stanchfield is one of those.
“It should add a fair amount of liquidity to the bitcoin market,” he said.
The recent price surge means the value of bitcoin has increased more than three times from a year ago. It had a price of $421.60 around this period in 2016, according to NBC News. By contrast, the price of gold is not significantly different from what it was same period last year.
Some experts said reduction in the reward for bitcoin miners has helped to boost value. This has reduced the amount of the cryptocurrency in circulation.
In a letter to investors, Dan Morehead noted that the use of bitcoin for transactions affects price. Both of these have risen rapidly. The Pantera Capital chief executive expects price to possibly rise as high as $2,288 by end of 2017.
The Winklevoss ETF would need bitcoin worth an estimated $300 million, if approved by the SEC. This is thought capable of doubling the digital currency’s value.
There are two other pending bitcoin ETF filings with the SEC, both of which were made last year. They were submitted by Grayscale’s Bitcoin Investment Trust and US blockchain tech firm SolidX Partners Inc.