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Massive Buyers on CME Might Be Front-Running Bitcoin ETF Approval, Analysts Suggest

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Wed, 10/06/2021 - 18:16
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Alex Dovbnya
Market analysts claim that people in the know might be front-running an imminent Bitcoin ETF approval
Massive Buyers on CME Might Be Front-Running Bitcoin ETF Approval, Analysts Suggest
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Dylan LeClair, co-founder of cryptocurrency consulting firm 21st Paradigm, has suggested that CME Group’s futures traders might be front-running an incoming approval of a Bitcoin exchange-traded fund in the U.S.

CME futures basis, which shows the difference between the spot price and the futures price, has witnessed a significant spike over the past day.

The fact that contango is higher on CME than on Panama-headquartered Deribit shows that strong buying pressure is mainly coming from the U.S.  

His take was also echoed by BlockTower’s Mike Bucella, who also said that the ga could be caused by short positions getting margin-called during Bitcoin’s recent ascent to the $55,000 level.    

U.S. Securities and Exchange Chair Gary Gensler has repeatedly voiced his support for a Bitcoin ETF backed by CME futures that will be regulated under the Investment Company Act of 1940 over the past few months.

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SEC Chairman Gary Gensler Calls for More Regulatory Authority Over Crypto
Bloomberg’s senior ETF strategist Eric Balchunas believes that there is a 75% chance of a futures-based Bitcoin ETF being approved in October.

In a recent Forbes interview, former SEC Chair Jay Clayton, who failed to approve a Bitcoin ETF during his term, said that market interiority and surveillance were the two key prerequisites to approving a Bitcoin ETF:

I think the SEC has been very clear about market integrity. Gensler has been very clear about market integrity and surveillance being a key threshold to the approval of ETFs in the space. I think that’s appropriate.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.