Not only has the bullish momentum impacted the broader cryptocurrency market, it has also left its mark on associated stocks.
On Tuesday, Bitcoin experienced an upsurge of nearly 10 per cent, hitting its 18-month high at $34,872. This increase was triggered by growing conjecture about the introduction of an exchange-traded bitcoin fund (ETF).
Not only has the bullish momentum impacted the broader cryptocurrency market, it has also been noticeable in associated stocks.
It is projected by the market that considerable demand could be spurred by the US Securities and Exchange Commission’s (SEC) endorsement of a spot bitcoin ETF.
The argument is that an ETF like this could allow investors, who were previously unsure, to invest in cryptocurrencies via the stock market, possibly leading to a significant influx of funds into the sector.
Bitcoin, a digital asset known for its high volatility and whose price has surged two-fold this year, is now priced at $34,020. This is the peak value it has reached since May 2022.
The price briefly soared past $35,000 during trading hours in Asia. Concurrently, Ether – ranked as the second most significant cryptocurrency – also witnessed a surge of 4.50 per cent to achieve a record high since August of $1,786.30.
Bitcoin’s rise isn’t just influencing the cryptocurrency market. Stocks linked to the crypto industry, such as the prominent US exchange Coinbase Global and Bitcoin owner MicroStrategy, experienced increases of over 7 per cent and 12 per cent respectively.
Reuters reported a statement from Antoni Trenchev, who co-founded the digital asset company Nexo.
“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.”
The expectation of a Bitcoin ETF getting approved soon is being strengthened by major US financial companies like BlackRock that have ongoing ETF applications. Information suggests that the listing of BlackRock’s iShares ETF on DTCC clearing house’s website has added more fuel to this conjecture.
This month’s reports, including a Reuters article, hinted that the SEC would not challenge a court decision which found the agency guilty of unjustly denying an ETF application from crypto company Grayscale Investments.
Reuters reported that Geoffrey Kendrick, the leader of digital assets research at Standard Chartered, commented after the court officially confirmed its verdict on Monday and redirected the application to the SEC for further review.
“The SEC being pressured by the courts increases the probability of an ETF approval.”
(With inputs from Reuters)