The price of bitcoin hovered just below its all-time high on Tuesday, continuing an almost one-month rally at least partly driven by enthusiasm around the launch of a bitcoin futures ETF this week.
Bitcoin added more than 4% to reach $64,206.51, according to Coin Metrics, about 1% from its April 14 all-time high of $64,899.
On Tuesday morning the ProShares bitcoin-linked exchange-traded fund made its debut on the New York Stock Exchange. It's the first bitcoin ETF to trade in the U.S. on a regulated exchange and comes after many years of the cryptocurrency industry hoping to get one launched to provide investors easy and safe access to bitcoin exposure. The ETF, which tracks CME bitcoin futures, rose more than 4% Tuesday.
A breakout to new all-time highs would be a positive long-term development targeting $89,800, according to Fairlead Strategies' Katie Stockton. Fundstrat's Tom Lee said Monday that he can see the bitcoin futures ETF driving the price above $100,000, his long-time price target on the cryptocurrency.
However, others are skeptical the newly traded ETF will drive much upward price action.
"The price of bitcoin will rise but not directly from futures-ETF buying," said Jodie Gunzberg, director of CoinDesk Indexes. "Futures prices are based on the spot price, not the other way around, so in terms of bitcoin and crypto adoption, this is an advancement, which can drive demand. But futures prices don't drive spot."
D.A. Davidson analyst Chris Brendler added that he "does not expect the introduction of futures ETFs to drive a price impact as significant as we would see from a pure spot Bitcoin ETF vehicle."
The fund tracks CME bitcoin futures, or contracts speculating on the future price of bitcoin, rather than the price of bitcoin itself. That means investors in the ETF should expect variances in the price and performance of the shares ETF shares and the cryptocurrency.