Bitcoin
and other cryptocurrencies surged Tuesday amid a fresh wave of hopes that U.S. regulators will soon approve the first spot Bitcoin exchange-traded fund, anticipation over which has been a key driver of the latest crypto rally.
The price of Bitcoin has gained 5% over the past 24 hours to $43,000, trading at the highest level in more than a week after slipping down to near $40,000 in prior days. The largest digital asset remains shy of its recent peak above $44,000, which marks the highest levels since April 2022 and the zenith of a rally that has carried Bitcoin more than 50% higher since mid-October.
“Bitcoin has formed a double bottom on the intraday charts, and this dynamic indicates that the mood for a deeper correction has not materialized,” said Alex Kuptsikevich, an analyst at broker FxPro.
Tight token supply and a supportive macro backdrop have boosted Bitcoin—which has gained with the
Dow Jones Industrial Average
and
S&P 500
amid expectations of lower interest rates soon—the major narrative behind the rally has been crypto-native.
Traders have been anticipating for months that the Securities and Exchange Commission (SEC) will soon approve the first spot Bitcoin exchange-traded fund (ETF) in the U.S., holding Bitcoin itself and expected to usher in new investor interest. ETF hopes were reinvigorated this week after
BlackRock
—which in many ways kickstarted this wave of gains when it filed for a fund over the summer—modified its application in a way viewed as accommodative of SEC concerns.
“The Trust issues and redeems Baskets on a continuous basis. These transactions will take place in exchange for cash. Subject to the In-Kind Regulatory Approval, these transactions may also take place in exchange for Bitcoin,”
BlackRock
detailed in a regulatory filing late Monday. The update to BlackRock’s application details that the ETF will at last initially issue and redeem shares in the fund in exchange for cash, not the digital asset underlying the fund’s holdings, with cash issuance and redemption being preferred by regulators.
BlackRock’s update is an incremental move that looks to have come at just the right time for crypto markets, with Bitcoin sliding lower in recent days amid signs of profit-taking. The specter of an SEC judgment looms large, with the agency facing an early-January deadline to make a final decision on a spot Bitcoin ETF from ARK and 21Shares, with more deadlines looming next month.
While spot Bitcoin ETFs have been long-awaited by crypto traders, there remain concerns that eventual approval could deliver a “sell the news” situation, and not buoy prices as much as hoped. Nevertheless, at least in the short term, Bitcoin ETFs remain on the brain for crypto bulls.
Beyond Bitcoin,
Ether
—the second-largest token—rose 5% to $2,240. Smaller tokens or altcoins also advanced, with
Cardano
climbing 7% and
Polygon
popping 3%. Memecoins were similarly strong, with
Dogecoin
up 5% and
Shiba Inu
gaining 7%.
Write to Jack Denton at [email protected]
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