Bitcoin is at it once again having broken the Ksh.6.6 million (US$.60,000) barrier over the weekend, to a brief high of Ksh.6.8 million (US$.62,600), for the first time in six months.
At the time of publishing this article, the price of Bitcoin traded Ksh.6,909,469.24, putting it in range of the all-time high price of $64,800 reached on April 14.
The uptick was caused by news on Friday that the SEC is set to greenlight Bitcoin futures Exchange-Traded Funds (ETFs).
The Securities and Exchange Commission (SEC) is poised to allow the first U.S. Bitcoin futures exchange-traded fund to begin trading in a watershed moment for the cryptocurrency industry, according to people familiar with the matter, Bloomberg reported on Friday.
The regulator isn’t likely to block the products from starting to trade this week, said the people, who asked not to be named while discussing the decision.
Bitcoin futures will allow investors to speculate on the price of Bitcoin without having to actually buy any of the cryptocurrency and are theoretically less volatile than investing in Bitcoin itself.
Futures are contracts that commit investors to buy or sell a commodity at a certain price on a certain date.
For instance, you could commit to buying a 1 Bitcoin for $100,000 in 5 years. If the price of a Bitcoin on that date is $200,000, you’d have made money. If the price of a Bitcoin on that date is $50,000, you’d have lost money.
A futures ETF is notably different from a standard exchange-traded fund, which Bitcoin enthusiasts have been lobbying for.
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A typical ETF would give investors exposure to the underlying asset, in this case, Bitcoin, whereas a Futures ETF allows investors to speculate on the price of the asset.
Many people have remained skeptical about cryptocurrencies, and Kenyan enthusiasts who believed in the works of Bitcoin, say the majority continue to lose purchasing power daily as the shilling fiat backed by the USD continues to lose value due to inflation.
“It also means for the sharp Kenya’s who have embraced Bitcoin specifically, their investment has increased and they clearly have chosen the best store of value know to man to date,” said Guantai Kathurima, a Kenyan Bitcoin enthusiast.
Policymakers have said in the past that cryptocurrencies are too prone to fraud and manipulation to be approved for ETFs backed by actual Bitcoins.
Regardless, the fact that cryptocurrencies are being integrated into the SEC’s framework was enough to boost Bitcoin and many other currencies.
Bitcoin’s price began to explode last September, shooting from just under $12,000 at the beginning of the month to over $60,000 by April.
A wave of bad news, including Elon Musk reneging on his blanket support of Bitcoin and a crackdown on cryptocurrency services in China, caused the price to drop significantly in May. In July, Bitcoin briefly fell below $30,000.
1 Bitcoin = Ksh.6,909,469.24.
1 USD = Ksh.110.91.
