Bitcoin continues to soar, reaching an impressive $32,000 and marking its highest peak this year, as market confidence surges with the anticipation of federal regulators giving the green light to BlackRock and Fidelity’s applications to operate crypto funds.
Bitcoin reached a significant milestone on Monday, surpassing $32,000 – its highest level this year. This surge in price came as a federal appeals court ruling cleared the way for a spot Bitcoin exchange-traded fund (ETF). ETFs function like stocks and can be traded on exchanges. In the case of a Bitcoin ETF, its value would reflect the performance of Bitcoin.
Major investment companies such as BlackRock and Fidelity have applied to operate their own Bitcoin ETFs, but the US Securities and Exchange Commission (SEC) has yet to approve them. The legitimization of spot Bitcoin ETFs by the SEC is expected to lead to mainstream acceptance of Bitcoin as an asset class, increasing demand and therefore its value.
Although Bitcoin has reached the $30,000 mark multiple times in 2023, it has struggled to sustain these highs for extended periods. Its current price remains well below its 2021 record of nearly $69,000. The SEC has previously denied applications for Bitcoin ETFs, citing concerns about fraud and market manipulation.
The recent ruling by the DC Circuit Court of Appeals in the dispute between the SEC and crypto asset manager Grayscale requires the agency to reconsider its rejection of Grayscale’s spot Bitcoin ETF application. The SEC is also reviewing proposals from other investment companies and is expected to make a decision by next year.
The growing investor confidence in the imminent approval of Bitcoin ETFs has contributed to the recent momentum in Bitcoin’s price. In late afternoon trading on Monday, Bitcoin was up by over 6 percent in 24 hours, reaching its highest price of 2023, just below $32,000.
It’s worth noting that Bitcoin briefly surged to nearly $30,000 last week following a fake news report about the SEC approving BlackRock’s spot Bitcoin ETF. The rise in Bitcoin’s price on Monday also had a positive impact on the shares of crypto and blockchain companies such as Coinbase Global and Marathon Digital Holdings.
Bitcoin’s rally coincides with increasing fear in financial markets about the potential expansion of the conflict between Israel and Hamas into a broader regional conflict. This geopolitical tension has driven demand for scarce assets like physical gold and Bitcoin, which some investors view as digital gold.
Additionally, the yield on 10-year US Treasuries surpassed 5 percent for the first time since 2007 on Monday, causing market concerns and potentially impacting the US economic expansion.
Overall, Bitcoin’s recent surge and the potential approval of Bitcoin ETFs by federal regulators have generated optimism among investors and the crypto community. The future of Bitcoin as a mainstream asset class remains uncertain, but these developments indicate a growing acceptance and interest in the cryptocurrency.
