Bitcoin, the pioneering cryptocurrency, experienced a 6% surge on Tuesday, reaching $35,198, a price point not seen in nearly a year and a half. This remarkable surge followed a significant 10% increase on Monday, igniting excitement within the broader cryptocurrency market and related stocks. The primary driver behind this surge is the anticipation of an imminent exchange-traded bitcoin fund, as investors eagerly await a crucial decision from the U.S. Securities and Exchange Commission (SEC).
This potential exchange-traded fund (ETF) promises to revolutionize the cryptocurrency sector by offering a formalized investment avenue for those who have been hesitant to enter the market. If approved, the ETF could attract a broader range of investors and subsequently infuse fresh capital into the cryptocurrency realm.
Steen Jakobsen, Chief Investment Officer at Saxo, noted, “The value of any asset, basically, is the amount of people using it. So the ETF would make a large audience and increase liquidity.”
Simultaneously, Bitcoin has demonstrated remarkable growth throughout the year. It is currently up 3.2%, trading at $34,129, while the second-largest cryptocurrency, Ethereum (ETH), has also experienced a notable uptick in value, reaching levels not seen since August.
This bullish sentiment has spilled over into stocks connected to Bitcoin, including the major U.S. exchange Coinbase Global and MicroStrategy, the prominent Bitcoin holder. Furthermore, several significant financial institutions in the United States, including investment behemoth BlackRock, have pending applications for Bitcoin ETFs, further fueling speculation.
Adding to the excitement, the appearance of BlackRock’s iShares ETF on the website of the Depository Trust & Clearing Corporation (DTCC) has stirred interest. The timing and rationale behind the listing remain uncertain, but it has only intensified speculation.
In a turn of events this month, the SEC refrained from appealing a court ruling that overturned its rejection of an ETF application from Grayscale Investments, a cryptocurrency-focused firm. This development has heightened expectations of an ETF approval, according to Geoffrey Kendrick, the Head of Digital Assets Research at Standard Chartered.
BlackRock, however, has issued a statement denying an erroneous report claiming that its ETF had already received approval.
Furthermore, data from Coinglass, a cryptocurrency derivatives analysis site, reveals substantial short-covering in Bitcoin over the past 24 hours, adding to the mounting excitement within the market.
The recent 6% surge in Bitcoin showcases the cryptocurrency’s enduring appeal and its potential to reshape the financial landscape in the months ahead.
Source: Reuters
