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Bitcoin nears $60K on futures ETF hopes

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Yahoo Finance Live discusses Bitcoin's surge on signs that the SEC will approve the first U.S. Bitcoin futures ETF.

Video Transcript

BRIAN SOZZI: The Bitcoin bulls may soon have yet another reason to come out with grand price predictions. The SEC is unlikely to block a new Bitcoin futures ETF product from starting to trade next week, Bloomberg reported. Yahoo Finance crypto reporting team of Jennifer Schoenberger and David Hollerith are here with us right now. Good morning to you both. Jen, let me start with you. This sure seems to be moving very quickly.

JENNIFER SCHONBERGER: Good morning, Brian. Yeah. You know, it's funny because you and I were just talking about this yesterday on the show. And low and behold, a report out this morning that the SEC is poised to allow approval of a Bitcoin futures ETF next week. Allow those ETFs to begin trading.

When I spoke with the SEC this morning, however, no comment. We do know that SEC chair Gary Gensler has warmed up to the notion of approving these Bitcoin futures. ETFs, I want to emphasize futures here as opposed to the actual underlying cryptocurrency of Bitcoin.

Saying that he would feel more comfortable approving that under the so-called 1940s law, which is a bit of a stricter law that governs mutual funds as opposed to going with the 1933 law, which currently governs ETFs that we know today. So we'll be watching.

JULIE HYMAN: We will be watching and obviously the Bitcoin Bulls out there already watching. David, we were just showing the price, which has been pushing up. Seemingly in anticipation of one of these ETFs getting through finally after a lot of waiting on the part of the crypto community. What are you hearing from folks who invest in this stuff about what this is going to do and to the prospects for Bitcoin?

DAVID HOLLERITH: Yeah. Well, Julie, there's actually been a little bit of a mixed consensus, you know. I think for most people, there's never been a time, where people haven't been in the crypto space waiting for a Bitcoin ETF.

So there's a little bit of concern given that in the past, these sort of large adoption events that are put on one day sort of become a, you know, buy the rumor, sell the news kind of situation. So I think that-- I've heard a lot of optimism, especially on Twitter.

But then also, a little bit of concern that this might-- this effect might be more like, you know, adding another hose to a pool your foot filling up. So it will increase levels. But you know, nothing immediately to what people are expecting.

On the other hand, I have also heard people say, you know, immediately financial advisors are going to be jumping into this. And we might see an immediate impact. But I do expect there will be a lot of people who are looking at this event. I'm expecting it to be a good time to drop their bags.

BRIAN SOZZI: Jen, ain't nothing for free in this world. I mean, this-- could this be the first step towards, you know, the government regulating cryptocurrencies and other Bitcoin and Bitcoin?

JENNIFER SCHONBERGER: Absolutely, Brian. This opens the door. We do know that the treasury is likely to be putting out some new regulatory proposals on stablecoins. So different than-- than Bitcoin. But we do know that regulation is coming.

I do want to note, though, that once the SEC does approve a Bitcoin futures ETF, you know, we do know that Bitcoin futures are regulated currently by the CFTC and do trade on the Chicago Mercantile Exchange. So this is basically packaging that product and putting it into an ETF and allowing the retail investor to gain exposure that way. So it makes it a bit easier.

So you know, is this the first step really the SEC is taking on this front? To then, perhaps see how it trades and what that's going to mean for regulating other cryptocurrencies as securities, other funds, other products.

It'll-- it'll be interesting to watch and whether the SEC then decides to open up and say, you know, what we're going to allow ETFs that invest directly in the actual Bitcoin as opposed to Bitcoin futures.

DAVID HOLLERITH: Yeah, it's an interesting point. I think another thing that I've been watching pretty intently is, you know, in my opinion is who gets picked first now. We have pro shares and Invesco on the radar.

But you m there's actually sort of been a dual precedent in the past about whether or not an ETF when it's approved, a group is-- is sort of approved together or it's just the first people filed. So that'll also be interesting to see what kind of message the SEC is sort of trying to send about this.

Because there is definitely a first mover advantage for-- for whoever issues an ETF first. So people who come in a little bit later might have a little bit more-- more difficulty sort of gaining investors. So--

JULIE HYMAN: You-- to this point, David, was it 2012, 2013 that the Wangler's Twins applied for their Bitcoin ETF? Was it that long? I mean, it was a long time ago that we first saw these types of applications.

People have been trying for this thing for years. I think there's was direct currency backed. And-- and Jen, I would argue the SEC is highly unlikely to approve a straight Bitcoin back ETF. We'll see. But it--

JENNIFER SCHONBERGER: No, I agree. Julie, I really see right now. But I think that this opens the door to see how the futures trade to see whether that could be an option.

JULIE HYMAN: Yeah, most definitely. So we'll see. There's a lot riding on this obviously. I think Vaneck is another that is going to be considered soon too in terms of all those ETFs. But definitely, a good point about that first mover advantage, David.

BRIAN SOZZI: Well, both of you are lifeline. So be on the lookout for more Slack messages for me on this topic. Jennifer Schoenberger, David Hollerith, good to see you.