Bitcoin reaches near 18-month high amid growing ETF speculation
Bitcoin rose nearly 10 per cent on Tuesday, reaching $34,872, its highest value in nearly 18 months. The rally followed mounting speculation about the launch of an exchange-traded bitcoin fund (ETF).
The bullish momentum has not only influenced the wider cryptocurrency market but has also made its presence felt in related stocks.
The market anticipates that the approval of a spot bitcoin ETF by the US Securities and Exchange Commission (SEC) could drive substantial demand.
It is being argued that such an ETF would provide previously hesitant investors with access to cryptocurrencies through the stock market, potentially ushering a new wave of capital into the sector.
At present, Bitcoin, a highly volatile digital asset that has seen its price double this year, is trading at $34,020, marking the highest value since May 2022.
During Asian trading hours, it even briefly exceeded $35,000. The second-largest cryptocurrency, Ether, also experienced gains, rising by 4.50 per cent to reach $1,786.30, its highest value since August.
The impact of Bitcoin’s ascent is not limited to the cryptocurrency market. Shares tied to the crypto industry, including major US exchange Coinbase Global and Bitcoin holder MicroStrategy, surged by more than 7 per cent and 12 per cent, respectively.
Reuters quoted Antoni Trenchev, co-founder of digital asset firm Nexo, as saying, “A sense of excitement has erupted in the crypto market and now it’s just a case of waiting to see if and when something concrete emerges from the SEC.”
This surge in optimism about a Bitcoin ETF’s imminent approval is bolstered by the presence of major US financial firms, including investment giant BlackRock, with pending ETF applications. Reports indicate that BlackRock’s iShares ETF has been listed on the website of clearing house DTCC, further fuelling speculation.
Reports this month, including one from Reuters, suggested that the SEC would not contest a court ruling that held the agency of wrongfully rejecting an ETF application from crypto firm Grayscale Investments.
On Monday, the court formalised its decision, sending the application back to the SEC for a re-evaluation. Reuters quoted Geoffrey Kendrick, the head of digital assets research at Standard Chartered, as saying, “The SEC being pressured by the courts increases the probability of an ETF approval.”
(With inputs from Reuters)
