“Bitcoin’s intriguing journey through history takes an exciting turn as it embraces the bullish momentum, surging 10% in just a week, fueled by the tantalizing speculation surrounding the potential approval of an ETF.”
A Bitcoin rally fueled by optimism about fresh demand from exchange-traded funds (ETFs) may have further to run if history is any guide. In the past five years, weekly gains of at least 9.8% have been followed by an average 10% climb in Bitcoin over the subsequent month.
Traders are betting on the possible approval of the first US ETFs investing directly in Bitcoin in the coming weeks. Asset managers such as BlackRock Inc. and Fidelity Investments are among the fund firms competing to offer a spot Bitcoin ETF in the US. If approved, these funds could bring new inflows into the cryptocurrency market, particularly from institutional players.
Bitcoin is also finding support from a shift in tone by Federal Reserve speakers, who have hinted at a reduced need for another interest-rate hike following tightening in financial conditions. This change in sentiment has further bolstered the optimism surrounding Bitcoin’s rally.
The rally in Bitcoin has also had a positive impact on other cryptocurrencies, with smaller tokens like Ether experiencing a 4% increase in value on Monday. This surge in altcoin prices is likely due to traders covering their short positions in anticipation of the market following Bitcoin’s upward momentum.
While the Securities & Exchange Commission (SEC) has resisted spot Bitcoin ETFs in the past due to concerns about fraud and manipulation, the applications from major investment firms have sparked speculation that the agency may relent. The recent indication that the SEC won’t appeal a court ruling that could allow the Grayscale Bitcoin Trust to convert to an ETF further supports the belief that the approval of a spot Bitcoin ETF is inevitable.
Bitcoin’s dominance in the digital asset market has increased, accounting for almost 50% of the $1.2 trillion market. However, it is still well below its 2021 record of nearly $69,000. With the potential for further volatility in Bitcoin, market participants will be closely watching for any developments regarding the approval of Bitcoin ETFs.
Overall, the optimism surrounding Bitcoin’s rally and the potential approval of ETFs investing in the cryptocurrency suggest that the current upward trend may continue in the coming weeks. As always, investors should exercise caution and closely monitor any regulatory developments that could impact the market.