Bitcoin Surges to Near 18-Month High Amid ETF Speculation
Bitcoin Continues to Rise on ETF Speculation
Bitcoin reached a new high of $35,198 on Tuesday, marking its highest level in almost a year and a half. The surge in price is largely attributed to the increasing speculation surrounding the approval of an exchange-traded bitcoin fund (ETF). This follows a significant 10% surge on Monday, which was the cryptocurrency’s best day in nearly a year. The positive sentiment has also spread throughout the wider crypto market and related stocks.
Anticipation Builds for SEC Approval
The potential approval of a bitcoin ETF by the U.S. Securities and Exchange Commission (SEC) is expected to drive further demand. Market participants believe that a spot bitcoin ETF would provide access to crypto assets for investors who were previously hesitant, thereby attracting new capital to the sector. According to Steen Jakobsen, CIO at Saxo, the value of any asset is determined by the number of people using it. Therefore, an ETF would not only bring in a larger audience but also increase liquidity.
Bitcoin’s Impact on the Market
Bitcoin’s volatility has been a topic of discussion as its price has already doubled this year. As of now, bitcoin is up 3.2% at $34,129, while the second-largest cryptocurrency, ether, has also seen a significant increase in value, reaching its highest level since August. This positive momentum has also benefited crypto-related shares like Coinbase Global and MicroStrategy, which experienced a rise in after-hours trade.
Major Financial Firms Eye Bitcoin ETFs
Several major U.S. financial firms, including BlackRock, have pending applications for bitcoin ETFs. The speculation surrounding their potential approval has been fueled by the recent listing of BlackRock’s iShares ETF on the website of clearing house DTCC. While it remains unclear when or why the listing was added, the fact that the SEC won’t appeal a court ruling against rejecting an ETF application from Grayscale Investments has increased the probability of approval.
Market Signals and Bitcoin Short-Covering
Last week, BlackRock denied a report that its ETF had been approved. However, data from Coinglass, a crypto derivatives analysis site, revealed significant bitcoin short-covering in the past 24 hours, indicating a positive market sentiment.
With mounting anticipation and positive market signals, the possibility of a bitcoin ETF approval is generating significant interest. As the crypto market continues to evolve, the introduction of such an ETF could potentially attract a new wave of investors and further solidify bitcoin’s position as a mainstream asset.
