Bitcoin
and other cryptocurrencies gained Tuesday as momentum for digital assets continued amid rising expectations that regulators will soon approve spot Bitcoin exchange-traded funds, a long-awaited catalyst for cryptos.
The price of Bitcoin has risen 2.5% over the past 24 hours to near $28,450, holding firmly above a range around $26,000 that had held for much of the past two months amid stagnant sentiment and historically low volatility and trading volumes. The largest digital asset even spiked above $30,000 on Monday following a false news report that the Securities and Exchange Commission had approved a spot Bitcoin exchange-traded fund (ETF), likely marking just the start of ETF-linked volatility.
“We upgrade our short-term bias to bullish,” said Katie Stockton, managing partner at technical research firm Fairlead Strategies. “A decisive breakout by Bitcoin would target secondary long-term resistance near $35,700. Long-term support remains intact near $25,200. Long-term momentum is improved for Bitcoin.”
Bitcoin has been on a rally since Friday, when news broke that the SEC declined to file a challenge to a federal court ruling that all but paved the way for digital asset manager Grayscale to convert its Bitcoin trust into an ETF. The prospect of a spot Bitcoin ETF—which would hold the token itself as opposed to funds holding futures—has been a looming catalyst for cryptos since the summer, when
BlackRock
and other mainstream financial giants filed for SEC approval.
Regulatory clearance of such funds is widely expected to rejuvenate crypto markets and usher in a fresh wave of investment in Bitcoin, though there remains uncertainty and likely bumps in the road before any spot Bitcoin ETF begins trading. Nevertheless, traders are growing more bullish that the SEC green-light is on the way, especially for the conversion of the
Grayscale Bitcoin Trust.
Just look at the Grayscale discount. The asset manager’s trust trades like a closed-end fund, with its price deviating from the net asset value of the Bitcoin it holds. That deviation has been a discount for almost two years, but it is narrowing: The Grayscale discount stood below 15% on Tuesday, down from around 19% at the start of the month and at its narrowest since late 2021.
Beyond Bitcoin,
Ether
—the second-largest crypto—rose 1% to $1,590. Smaller cryptos or altcoins were more mixed, with
Cardano
trading below flat but
Polygon
up 1%. Memecoins were also mixed, with
Dogecoin
gaining less than 1% and
Shiba Inu
shedding 1%.
Write to Jack Denton at [email protected]
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