Bitcoin Price Surges Past $66,000, Reaching New High

The latest of them was the approval by the Securities and Exchange Commission for the first bitcoin-focused ETF, which began trading Tuesday and rose 5% in its debut. Nearly $1 billion of shares changed hands over the session, making it the second-most highly traded ETF debut ever.

The new fund, which holds bitcoin futures contracts rather than the coins themselves, makes it easier for regulated institutions to get exposure to bitcoin and the broader crypto market.

“Crypto is finding its footing as an investment vehicle, and the rollout of ETFs could be a big step in that direction,” said

Lindsey Bell,

the chief investment strategist at Ally Invest. She said the fund moves may not closely track price changes in bitcoin, making the ETF an imperfect proxy for investors.

Other bitcoin futures ETFs are expected to start trading in the coming weeks. They should open up a new way into crypto markets for investors who “have long been deterred by regulatory uncertainty and risk” of buying bitcoin directly, said Hong Fang, the chief executive of crypto exchange OKCoin.

While bitcoin can be used as currency—most notably in El Salvador, which declared it legal tender this summer—its appeal is almost entirely as a speculative financial investment. It has been a favorite among the meme-stock, Reddit-wired crowd of younger investors, who see cryptocurrencies like bitcoin and the joke-inspired dogecoin as a ticket to wealth and a thumb in the eye of the financial establishment.

Like other fad investments, bitcoin’s price has been wildly volatile. It traded at less than $12,000 a year ago, surfed the $30,000-range in January, surged past $64,000 in April, then fell by more than half through July, according to CoinDesk. A crackdown by China against bitcoin, as well as heightened regulatory scrutiny around digital assets and people taking profits on gains have hampered bitcoin’s price in recent months.

A website called alternative.me maintains a “fear and greed” index for bitcoin, combining measures of price swings, trading volumes, and social media and search trends. The index on Wednesday stood at 82 out of 100, indicating “extreme greed.”

Despite the latest rally and bout of momentum, there are still questions about bitcoin and cryptocurrencies in general, said UBS analyst

Mark Haefele.

Regulatory risk is still real, he said, and wild price swings make cryptocurrencies a “questionable value” as a way to hedge portfolio risk.

At the same time, some pressure has been lifted off bitcoin as regulators started to move their target from the cryptocurrency to fast-growing decentralized finance projects and stablecoins, said John Patrick Mullin, co-founder of decentralized finance platform Mantra Dao. The Biden administration is now considering ways to impose banklike regulation on the cryptocurrency companies that issue stablecoins, digital currencies designed to combine the speed of bitcoin with the stability of the dollar, the Journal reported this month.

Institutions now seeing bitcoin as legitimized by the ETF listing will still take time to buy into the market, given a need to get clients on board and potentially alter their mandates, said Chris Bendiksen, bitcoin research lead at London-based asset management firm

CoinShares.

“This is going to be a bit of a slow process,” he said. “We might break through all-time highs but I’m not sure this will be some explosion of price right now.”

Write to Paul Vigna at paul.vigna@wsj.com, Elaine Yu at elaine.yu@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com