Bitcoin is on a remarkable ascent, reaching heights not seen in over a year and a half. The cryptocurrency surged by nearly 10% on Tuesday, soaring to an impressive $34,872. This comes hot on the heels of a 10% surge the day before, marking its best performance in almost a year. The excitement surrounding Bitcoin's rise has spilled over into the wider crypto market and even impacted related stocks.
What's driving this surge? Speculation is mounting that the U.S. Securities and Exchange Commission (SEC) is on the verge of approving an exchange-traded bitcoin fund (ETF). If this prediction comes true, it could ignite a surge in demand for Bitcoin. The argument goes that a spot bitcoin ETF would open the doors for investors who have been hesitant to enter the crypto world, allowing them to access this digital asset through the stock market. This, in turn, could bring a fresh wave of capital into the sector.
Steen Jakobsen, the chief investment officer at Saxo, believes that the value of any asset lies in the number of people using it. He sees the potential for an ETF to attract a large audience and increase liquidity in the Bitcoin market. With its price doubling so far this year, Bitcoin is proving to be a volatile yet enticing investment. As of now, it is up 9.51% at $34,530, reaching its highest level since May of last year.
Bitcoin isn't the only cryptocurrency experiencing a surge. Ether, the second-largest cryptocurrency, has also seen a significant climb. It rose by 6.82% to $1,825.50, its highest level since August. The crypto market is buzzing with excitement as these digital assets continue to make waves.
Crypto-linked shares like Coinbase Global and MicroStrategy saw an increase in after-hours trade. Notably, investment giant BlackRock, along with other major U.S. financial firms, has pending applications for bitcoin ETFs. The recent addition of BlackRock's iShares ETF to the DTCC list has fueled speculation about the potential approval of these applications. However, both DTCC and BlackRock have yet to comment on the matter.
Furthermore, reports suggest that the SEC will not appeal a court ruling that deemed their rejection of an ETF application from Grayscale Investments as incorrect. This development has heightened anticipation for an ETF approval. Standard Chartered's head of digital assets research, Geoffrey Kendrick, believes that the SEC's pressure from the courts increases the likelihood of such approval.
It is important to note that last week, BlackRock denied a false report claiming that their ETF had already been approved. Additionally, data from Coinglass, a crypto derivatives analysis site, revealed significant short-covering activity in bitcoin within the past 24 hours.
In a separate development, Grayscale, in collaboration with FTSE Russell, introduced five crypto sector indices. These indices will track the performance of crypto assets across various categories, including currencies, smart contract platforms, financials, consumer and culture, and utilities and services.
Overall, the crypto market is witnessing significant activity and speculation surrounding the potential approval of bitcoin ETFs. The involvement of major financial institutions like BlackRock and the court ruling in favor of Grayscale Investments have added to the excitement and anticipation within the industry.
