“Bitcoin’s monumental surge above $35,000 marks a remarkable milestone, propelling the cryptocurrency to its highest level since 2022, capturing the attention of investors worldwide.”
Bitcoin (BTC-USD) experienced a significant surge, surpassing $35,000 in its largest single-day jump in 13 months. This increase was fueled by optimism that the first spot bitcoin exchange-traded fund (ETF) is nearing regulatory approval. The cryptocurrency rose more than 10% on Monday, marking its biggest increase over a 24-hour period since September 2022. The price reached its highest point in a year and a half.
Alongside the rise in Bitcoin’s price, the stocks of digital asset companies also saw an increase. Coinbase, the largest US crypto exchange, opened 13% higher on Tuesday, while MicroStrategy rose 12%. Bitcoin mining firms Riot Platforms and Marathon Digital also experienced significant surges.
This rally seems to be driven partially by speculation that the Securities and Exchange Commission (SEC) is close to granting approval for a spot bitcoin ETF, which would allow investors to gain exposure to the cryptocurrency without owning it. BlackRock, among other money managers, has recently applied to launch such a product. Bitcoin supporters have pointed to the listing of BlackRock’s iShares Bitcoin Trust on the website of clearing house Depository Trust and Clearing Corporation (DTCC) as a positive sign. Additionally, rumors that BlackRock had begun seeding the fund added to the excitement. However, prices pulled back when BlackRock denied these rumors. Investors are now anticipating that the SEC will rule on the applications by January 10.
Another factor contributing to the recent price swings is the liquidation of levered positions on bitcoin. Over the past 24 hours, $231 million worth of levered positions have been liquidated, with 80% of these positions being short the digital asset.
The significant movements in the price of bitcoin in recent weeks have led to celebrations in the crypto community, with some seeing a return of the enthusiasm that characterized the industry during the early days of the pandemic.
Bitcoin reached its peak at $68,789 in November 2021 but experienced a crash in 2022 due to the Federal Reserve raising interest rates and various firms collapsing, including crypto exchange FTX. Currently, bitcoin has more than doubled since the beginning of January. MicroStrategy, the largest public company holding bitcoin, has a stash of 158,245 BTC worth approximately $5.4 billion.
Overall, the recent surge in bitcoin’s price can be attributed to optimism surrounding the potential approval of a spot bitcoin ETF and the liquidation of levered positions. The crypto community is hopeful that this signifies a return to the enthusiasm seen in the early days of the pandemic.
