* Hits $64,367.14, near its peak of $64,895
* ProShares bitcoin futures-based ETF trading on NYSE Arca
NEW YORK, Oct 19 (Reuters) - The first U.S. bitcoin
futures-based exchange-traded fund began trading on Tuesday,
sending bitcoin to a six-month high and just off its all-time
peak, as traders bet the ETF could boost investment flows into
The ProShares Bitcoin Strategy ETF closed up 2.59%
at $41.94 in its first day of trading, with around $1 billion
worth of shares trading hands on Intercontinental Exchange Inc's
NYSE Arca exchange under the ticker BITO.
The greenlighting of the ETF by the U.S. Securities and
Exchange Commission was seen as a watershed moment for
cryptocurrencies and helped push the price of bitcoin
as high as $64,367.14, its highest level since mid-April and
near its record of $64,895.22.
Bitcoin, the world's largest cryptocurrency, is notoriously
volatile, and has risen around 45% this month on hopes that the
advent of U.S. bitcoin ETFs - several of which are in the works
- will spur billions of dollars managed by pension funds and
other large investors to flow into the sector.
On Tuesday, there were very few block trades in BITO,
suggesting that smaller investors and high-frequency trading
firms dominated trading, said Dave Nadig, chief investment
officer and director of research at ETF Trends.
"I think what we saw today was retail, HFT algo trading
trying to find the arbitrage, and a whole lot of institutions
sitting on the sidelines and watching," he said.
Similar products were set to come to market, with Nasdaq Inc
having approved the listing of the Valkyrie Bitcoin
Strategy ETF on Friday, while Grayscale, the world's largest
digital currency manager, said it plans to convert its Grayscale
Bitcoin Trust into a spot bitcoin ETF.
Crypto ETFs have launched this year in Canada and Europe
amid surging interest in digital assets. VanEck and Valkyrie are
among fund managers pursuing U.S.-listed ETF products, although
Invesco on Monday dropped its plans for a futures-based ETF.
The SEC has yet to approve a spot bitcoin ETF.
Bitcoin futures have been overseen by the Commodity Futures
Trading Commission for four years and ETFs are regulated by the
SEC, offering some level of investor protection, the SEC's
chair, Gary Gensler, said on Tuesday.
"Yet it's still a highly speculative asset class and
investors should understand that underneath, there is the same
volatility and speculation," he told CNBC.
Bitcoin futures were up 4.85% at $64,640.
(Reporting by John McCrank in New York and Tom Wilson in London
Additional reporting by Tom Westbrook in Singapore and Katanga
Johnson in Washington
Editing by Andrea Ricci and Matthew Lewis)