US spot Bitcoin ETF approval is expected in the upcoming weeks.
With hopes of renewed demand from exchange-traded funds, bitcoin pulled back from its more than one-year highs.
As of Tuesday at 11:43 a.m. in New York, the greatest digital asset had risen as high as 11.5% to above $35,000 before reversing some of the gains to trade at $33,517. This brings its year-to-date recovery from the 2022 digital asset collapse to 102%.
Speculative enthusiasm for the cryptocurrency is being fueled by the potential approval of the first US spot Bitcoin ETFs in the upcoming weeks. BlackRock Inc. and Fidelity Investments are two asset managers competing to provide these kinds of products. Bulls in digital assets claim that the ETFs will increase the cryptocurrency’s ubiquity.
In addition, a US federal appeals court on Monday formally upheld Grayscale Investments LLC’s proposal to establish a spot Bitcoin exchange-traded fund (ETF) in the face of opposition from the US Securities and Exchange Commission.
Due to concerns about fraud and market manipulation, the SEC has thus far opposed approving exchange-traded funds (ETFs) that make direct investments in Bitcoin. The court decision and a rush of applications from major investors seeking to launch spot funds fueled rumours that the agency might give in.
ETF Ticker: On Monday, Eric Balchunas, an analyst with Bloomberg Intelligence ETFs, noted on X, the former Twitter platform, that the iShares Bitcoin Trust “has been listed on the DTCC” under the ticker IBTC. According to Balchunas, the listing appeared to have been removed on Tuesday.
“I’m not entirely surprised; I imagine they were instructed to wait until they are days, not weeks, or months away,” Balchunas remarked. “It was unexpected to see it on there, as I mentioned earlier.”
The iShares business is run by BlackRock, which is the largest asset manager in the world. The Depository Trust and Clearing Corp., also known as the DTCC, handles clearing and settlement for US markets.
Due to the excitement surrounding ETFs, Bitcoin also had an intraday spike of 10% last week. That time, the rise was sparked by an inaccurate story claiming that BlackRock had received approval to start a fund; once this error was discovered, the surge subsided.
In the slipstream of Bitcoin on Tuesday, Ether, the second-largest token, surged as much as 8.5% to momentarily surpass $1,800. Smaller coins like BNB, XRP, and Dogecoin—the meme-crowd favorite—first saw a significant increase before beginning to moderate.
According to Coinglass data, in the last day, nearly $387 million worth of cryptocurrency trading positions were liquidated, primarily by speculators who were betting on lower prices.
SEC Repression
ETFs that hold futures on Bitcoin and ether have previously been approved by the SEC. However, in the wake of last year’s market fall and other disasters like the bankruptcy of the FTX exchange, whose co-founder Sam Bankman-Fried is on trial for fraud, the agency has taken a more aggressive stance against cryptocurrencies.
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According to Elliott Stein and James Seyffart of Bloomberg Intelligence, “approval of a spot Bitcoin ETF looks inevitable” and while the exact date is still unknown, a number of funds are probably going to get the go-ahead.
Because of the market for riskier assets being suppressed by rising interest rates, Bitcoin is still below its top of roughly $69,000 set during the pandemic in 2021. The token’s recent decline in correlations with gold, bonds, and equities has raised concerns about the potential disengagement of mainstream investors.
According to Justin d’Anethan, head of business development for Keyrock, a cryptocurrency market maker in Asia Pacific, liquidity is “somewhat better than before.” “Prices have now recovered, bringing some liquidity with them, but it’s still nothing like the frenzy of 2020–2021,”