“Bitcoin’s remarkable ascent to a 2023 high is fueled by growing optimism as investors eagerly anticipate the potential approval of ETFs, signaling a significant milestone for the cryptocurrency’s mainstream adoption.”
Cryptocurrencies, including bitcoin, continued to surge in Asia trade on Tuesday, reaching an almost 18-month high. This bullish trend is largely driven by speculation that an exchange-traded fund (ETF) for bitcoin is on the horizon. Bitcoin’s price rose over 6% to $35,198, its highest level since May 2022. It had already experienced a 10% surge on Monday, marking its best session in nearly a year. So far in 2023, bitcoin’s price has doubled.
The anticipation of a bitcoin ETF is seen as a significant driver of demand, as it would provide an avenue for investors to gain exposure to bitcoin through the stock market. Investment giant BlackRock is among several firms that have pending applications for bitcoin funds in the United States. The recent listing of BlackRock’s iShares ETF on the website of clearing house DTCC has added to speculation about the potential approval of these applications. Additionally, reports have emerged that the US Securities and Exchange Commission (SEC) will not appeal a court ruling that rejected an ETF application from Grayscale Investments, further fueling expectations for a bitcoin ETF.
Steen Jakobsen, the Chief Investment Officer at Saxo, believes that an ETF for bitcoin would increase liquidity and attract a larger audience, ultimately boosting the value of the asset. However, it remains unclear when and why the iShares ETF was added to the DTCC list, and both DTCC and BlackRock have not yet commented on the matter.
Alongside the excitement surrounding a potential bitcoin ETF, data from Coinglass, a crypto derivatives analysis site, shows significant short-covering in bitcoin over the past 24 hours. This suggests that traders who had bet against bitcoin are now closing their positions, further driving up its price.
In addition to these factors, the broader market’s concerns about the risk of Israel’s war with Hamas escalating into a regional conflict, as well as the emergence of Javier Milei as the frontrunner for Argentina’s presidency, could be contributing to the increased demand for bitcoin. During times of crisis, bitcoin has often acted as a store of wealth.
Overall, the outlook for bitcoin and other cryptocurrencies remains positive, with the potential introduction of a bitcoin ETF expected to drive further growth and demand in the market.