Bitcoin Surges to 21-Month High on ETF Approval Speculation
Bitcoin reached a 21-month high on Tuesday, with its price soaring as speculation grew about the potential approval of a spot exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC). The world’s largest cryptocurrency rose by 6%, reaching $45,168.6, which marks its highest level since early April 2022. However, trading volumes remained low due to the ongoing New Year holidays.
This surge in Bitcoin’s value follows its stellar recovery in 2023, where it gained over 100% in value after starting the year around $17,000. The recent price increase is mainly driven by speculation surrounding the SEC’s decision on approving a U.S. ETF that directly tracks Bitcoin’s prices. Reuters reports that the SEC has until January 10 to approve or reject a spot ETF application from Ark and 21 Shares, which could set a precedent for similar applications from other fund managers.
According to Reuters, the SEC is expected to notify other applicants this week regarding the launching of their products by January 10. BlackRock, the world’s largest asset manager, has also applied for a spot Bitcoin ETF. It’s worth noting that in the past two years, the SEC has repeatedly rejected applications for a spot Bitcoin ETF, citing concerns about decentralized and volatile nature. Currently, all U.S.-traded Bitcoin ETFs track the token’s futures, which are traded on the Chicago Mercantile Exchange.
Grayscale, the operator of the GBTC ETF, has also applied to convert the product into a spot ETF. The company achieved a legal victory against the SEC, which forced the regulator to reconsider Grayscale’s spot ETF application. Proponents of Bitcoin argue that if a spot ETF is approved, it would lead to a significant influx of capital as traders will be able to invest in the token without directly holding cryptocurrency.
However, analysts caution that the approval of a spot ETF may not cause as significant a bull run as anticipated, especially considering the crypto industry’s loss of faith over the past two years. Bankruptcies of major crypto firms and regulatory crackdowns have significantly impacted retail interest in cryptocurrency. Bitcoin hit a low of $15,000 in late 2022. While the hope for ETF approval fueled the token’s recovery in 2023, trading volumes remained low compared to those seen during the 2021 bull run. High interest rates have also limited the inflow of capital into the crypto market.
Bitcoin Hits $45,000 as SEC Decision on ETF Nears
Bitcoin’s price has surged to $45,000, the highest it has been in 21 months, as anticipation builds around the U.S. Securities and Exchange Commission’s decision regarding the approval of a spot exchange-traded fund (ETF) for the cryptocurrency. The 6% increase in Bitcoin’s value to $45,168.6 on Tuesday marks a substantial gain for the digital asset, which has shown a remarkable recovery throughout 2023.
Starting the year at around $17,000, Bitcoin has experienced explosive growth over the past year, with the token surging over 100% in value. The recent surge in Bitcoin’s value can be attributed to the speculation surrounding the approval of a U.S. ETF that directly tracks the prices of Bitcoin. The SEC has until January 10 to approve or reject the ETF application from Ark and 21 Shares, a decision that could have implications for other fund managers looking to launch similar products.
Reuters also reports that the SEC will be notifying other applicants this week regarding the status of their applications to launch spot ETFs by January 10. BlackRock, the largest asset manager globally, is among the firms that have applied for a spot Bitcoin ETF. However, in the past, the SEC has consistently rejected spot Bitcoin ETF applications, citing concerns about the volatile and decentralized nature of the token.
Currently, U.S.-traded Bitcoin ETFs are based on futures contracts of the cryptocurrency, which are traded on the Chicago Mercantile Exchange. Grayscale, the company behind the GBTC ETF, has filed an application to convert the product into a spot ETF. The SEC’s previous rejection of a spot ETF application from Grayscale was overturned after the company’s legal victory, prompting the regulator to reconsider its decision.
If a spot ETF is approved, it is believed that a significant inflow of capital will be seen in the Bitcoin market as traders will be able to invest in the token without directly owning it. However, industry analysts caution that the approval of an ETF may not trigger as substantial a bull run as expected. The crypto industry has faced significant challenges and loss of credibility in recent years due to high-profile bankruptcies and regulatory crackdowns. Despite the token’s recovery in 2023, trading volumes have remained relatively low, and high interest rates have limited the amount of capital flowing into the crypto market.
US Regulators to Decide on Bitcoin ETFs by January 10
American regulators are facing a deadline of January 10 to approve or reject applications for Bitcoin exchange-traded funds (ETFs). The deadline set by the U.S. Securities and Exchange Commission (SEC) has generated increased speculation in the cryptocurrency market, leading to Bitcoin surging to a 21-month high. The value of Bitcoin rose 6% to $45,168.6, its highest level since April 2022.
Two prominent ETF applications from Ark and 21 Shares are under consideration, and if approved, they could open the door for other fund managers to launch similar products in the future. The anticipation surrounding the SEC’s decision has contributed to Bitcoin’s recent gains, as investors hope for increased institutional exposure to the cryptocurrency.
The SEC is expected to inform other applicants about the status of their ETF applications this week, potentially granting them approval to launch their products by the January 10 deadline. One of the major players awaiting approval is BlackRock, the world’s largest asset manager, which has also applied for a spot Bitcoin ETF.
However, the SEC has previously rejected applications for a spot Bitcoin ETF due to concerns about the decentralized and volatile nature of the cryptocurrency. Currently, all Bitcoin ETFs traded in the U.S. are based on futures contracts rather than the underlying asset. Grayscale, the operator of the GBTC ETF, has also applied to convert its product into a spot ETF and achieved a legal victory against the SEC, resulting in the regulator reconsidering its previous rejections.
Supporters of the cryptocurrency argue that the approval of a spot ETF would attract significant capital inflows into Bitcoin, as it would provide traders with access to the token without the need for direct ownership. However, analysts remain wary about the potential impact of an ETF approval, as the crypto industry has faced numerous challenges and a loss of trust in recent years.
The industry has witnessed high-profile bankruptcies and a regulatory crackdown, which have affected retail interest in cryptocurrencies. Despite the recovery seen in Bitcoin’s value throughout 2023, trading volumes have remained relatively low compared to the previous bull run in 2021. Furthermore, high interest rates have limited the amount of capital flowing into the crypto market, tempering expectations for a massive surge in Bitcoin’s value if an ETF is approved.
BlackRock Joins the Queue for Bitcoin ETF Approval
BlackRock, the world’s largest asset manager, has thrown its hat into the ring by applying for approval to launch a spot Bitcoin exchange-traded fund (ETF). The move comes as the U.S. Securities and Exchange Commission (SEC) considers applications for Bitcoin ETFs, with a decision deadline set for January 10.
BlackRock’s entry into the race adds to the growing anticipation surrounding potential institutional investment in Bitcoin. The cryptocurrency has experienced a surge in value, reaching its highest level in 21 months at $45,168.6, amid mounting speculation that the SEC may finally approve a spot ETF that directly tracks Bitcoin’s prices.
The SEC has been hesitant to approve spot Bitcoin ETFs in the past, as it has expressed concerns about the decentralized and volatile nature of the cryptocurrency. All existing Bitcoin ETFs traded in the U.S. are based on futures contracts rather than the underlying asset. However, the SEC’s decision on the applications from Ark, 21 Shares, and now BlackRock could pave the way for more firms to enter the market with similar products in the future.
Grayscale, the operator of the GBTC ETF, has also filed an application to convert its product into a spot ETF. The company achieved a significant victory over the SEC, forcing the regulator to reconsider its repeated rejection of a spot ETF.
Supporters of the cryptocurrency believe that the approval of a spot ETF could result in a flood of capital into Bitcoin, as investors would be able to access the token without direct ownership. However, some analysts caution that the approval may not trigger the anticipated bullish sentiment, as the crypto industry continues to recover from the fallout of high-profile bankruptcies and regulatory crackdowns.
Bitcoin has made significant gains throughout 2023, but trading volumes have been relatively low compared to the previous bull run in 2021. Furthermore, high interest rates have limited the amount of capital flowing into the crypto market. While Bitcoin ETF approval holds the potential for increased institutional participation, doubts remain about its immediate impact on the market.
Approval of Bitcoin ETF Could Bring Inflows, but Doubts Remain
Proponents of Bitcoin are optimistic that the approval of a spot exchange-traded fund (ETF) tracking the cryptocurrency’s price could result in a substantial influx of capital. However, doubts persist about the potential impact of the approval, given the challenges and loss of confidence that the crypto industry has faced in recent years.
Bitcoin’s recent surge to a 21-month high, reaching $45,168.6, has been fueled by speculation surrounding the U.S. Securities and Exchange Commission’s (SEC) decision on a spot ETF application deadline of January 10. The SEC has previously rejected spot ETF applications due to concerns about Bitcoin’s decentralized and volatile nature. Currently, all U.S.-traded Bitcoin ETFs are based on futures contracts rather than the physical asset.
The approval of a spot ETF would allow traders to invest in Bitcoin without direct ownership, potentially attracting significant capital. The anticipation of institutional involvement and increased liquidity has driven Bitcoin’s gains throughout 2023, as the token has seen a recovery of over 100% since the beginning of the year.
Despite this positive outlook, industry analysts emphasize the challenges that the crypto industry continues to face. The sector has witnessed high-profile bankruptcies and a regulatory crackdown, leading to a loss of faith among retail investors. Bitcoin’s value plummeted to as low as $15,000 in late 2022 due to these factors.
While ETF approval holds promise, skeptics argue that it may not trigger the same level of market enthusiasm as expected. Trading volumes in 2023 have remained significantly lower compared to the previous bull run in 2021, and high interest rates have limited the flow of capital into the crypto market. It is crucial to recognize that the industry is still in the process of rebuilding trust and confidence among investors.
In conclusion, the approval of a spot Bitcoin ETF by the SEC has sparked optimism within the cryptocurrency community. If granted, the ETF could potentially attract substantial capital inflows into Bitcoin. However, doubts remain about the immediate impact on the market, given the industry’s recent challenges and the cautious approach regulators have taken in the past.
Analyst comment
This news can be evaluated as positive for the market. The surge in Bitcoin’s value and speculation about the approval of a spot ETF by the SEC indicates growing confidence and interest in the cryptocurrency. If the spot ETF is approved, it could lead to a significant influx of capital into Bitcoin. However, analysts caution that the impact may not be as significant as anticipated due to the challenges and loss of faith the crypto industry has faced in recent years.
