Bitcoin Surges to Near 18-Month High Amid ETF Speculation
Bitcoin Continues to Rise on ETF Speculation
Bitcoin reached a new high on Tuesday, surging 6% to $35,198, its highest level in nearly a year and a half. This increase in value is primarily due to mounting speculation that an exchange-traded fund (ETF) for bitcoin is on the horizon. The previous day, bitcoin experienced a 10% surge, marking its best day in almost a year. This bullish trend has not only affected the crypto market but has also spilled over into related stocks.
ETF Approval Expected to Drive Demand
The potential approval of a bitcoin ETF by the U.S. Securities and Exchange Commission (SEC) is anticipated to fuel further demand for the cryptocurrency. The argument is that a spot bitcoin ETF would make the asset accessible to investors who have been hesitant to enter the crypto market, ultimately attracting a new wave of capital. Steen Jakobsen, CIO at Saxo, explains, “The value of any asset, basically, is the amount of people using it. So the ETF would make a large audience and increase liquidity.”
Bitcoin’s Volatility and Crypto Market Impact
Bitcoin, a highly volatile asset, has already seen its price double this year. Currently, it is up 3.2% at $34,129, while the second-largest cryptocurrency, ether, has also reached its highest level since August. This surge in cryptocurrencies has had a positive effect on related shares, including major U.S. exchange Coinbase Global and bitcoin owner MicroStrategy, which experienced a rise in after-hours trade.
BlackRock and Other Financial Firms Eye Bitcoin ETFs
BlackRock, along with other major U.S. financial firms, has pending applications for bitcoin ETFs. Speculation regarding their approval has been fueled by BlackRock’s iShares ETF listing on the website of clearing house DTCC. The recent reports suggesting that the SEC will not appeal a court ruling that deemed the rejection of an ETF application from crypto firm Grayscale Investments as incorrect have also contributed to the anticipation of ETF approval. Geoffrey Kendrick, head of digital assets research at Standard Chartered, believes that “the SEC being pressured by the courts increases the probability” of an ETF approval.
Short-Covering and Market Analysis
Last week, BlackRock denied an erroneous report stating that its ETF had been approved. Data from crypto derivatives analysis site Coinglass showed significant bitcoin short-covering in the last 24 hours, indicating a change in market sentiment.
Note: This rewritten article provides an overview of the recent surge in bitcoin prices and the anticipation surrounding the approval of a bitcoin ETF. It highlights the potential impact of an ETF on the crypto market and includes insights from industry experts. The article also mentions the involvement of major financial firms like BlackRock and provides analysis of market trends.