Bitcoin witnessed a significant surge, reaching a 21-month high, as the crypto market buzzed with anticipation over the potential approval of a U.S. bitcoin exchange-traded fund (ETF) this week. The world’s largest cryptocurrency by market capitalization saw an over 6% increase to $46,924.38, according to Coin Metrics data.
A major driver of Bitcoin’s six-month rally has been the rumors of an ETF approval in the U.S. This development would enable investors to track Bitcoin’s price through a regulated financial product without owning the cryptocurrency directly, which is particularly appealing to institutional investors.
The recent rally came as major financial institutions like BlackRock and Grayscale, among other potential bitcoin ETF issuers, submitted their final updates to the U.S. Securities and Exchange Commission (SEC). These updates included crucial fee disclosures, which have notably boosted investor confidence in the likelihood of an ETF approval.
Bitcoin even peaked at $47,238.92 earlier, marking its highest level since April 2022. This resurgence in Bitcoin’s price reflects growing investor optimism and a competitive atmosphere in the cryptocurrency ETF space. “It’s a price war,” noted Jim Angel, an associate professor at Georgetown University. He pointed out that with many vendors offering similar products, pricing has become a key battleground.
The SEC is nearing its first deadline to make a decision on one of the ETF applications – specifically, the one from Ark 21Shares, set for Wednesday. Market observers, including former SEC chair Jay Clayton, believe that the agency is likely to approve multiple applications simultaneously. Clayton expressed confidence in an approval during an appearance on CNBC’s “Squawk Box,” deeming it “inevitable” and a significant step for both Bitcoin and the finance sector at large.
Standard Chartered’s recent statement forecasts that a spot bitcoin ETF could trigger up to $100 billion in new inflows throughout 2024. This substantial capital influx could propel Bitcoin’s price to potentially reach $200,000 by the end of the year.
Bitcoin’s price gains follow a strong performance in 2023, where it rose 157%. The momentum is expected to continue into 2024, with investors looking forward to the Bitcoin halving in the spring, an event historically associated with price increases.
