Bitcoin (BTC) price briefly touched $35,000 earlier today, driven by growing excitement surrounding Bitcoin Spot Exchange Traded Funds (ETF) developments and increased trading volumes.
BlackRock’s Entry into the Bitcoin ETF Space
The recent increase in BTC price which briefly reached $35,000 can be attributed to the enthusiasm surrounding the possibility of a Bitcoin ETF being approved. This excitement has sparked optimism in the cryptocurrency market as investors and traders eagerly await the effects of this development.
BlackRock’s iShares Bitcoin Trust recently made significant progress in the quest to launch a Bitcoin ETF. It has been listed on the Depository Trust and Clearing Corporation (DTCC), the clearing house for NASDAQ trading. This marks a crucial milestone in bringing a spot Bitcoin ETF to U.S markets.
The ETF will be traded under the ticker IBTC, distinguishing it as the first spot Bitcoin ETF out of a dozen applications submitted since June 15. Additionally, BlackRock disclosed its seeding schedule, slated to begin in October 2023, a critical step in ETF funding.
The concept of a Bitcoin ETF, allowing for participation from investors and adding credibility to the world of cryptocurrencies, has undeniably played a role in driving up BTC value, indicating the market’s strong interest in regulatory advancements.
Valentine Odunze, Founder at Zeekad Digital, in his recent Linkedin post, listed the companies that have applied to the SEC for Bitcoin EFTs, along with the total assets under their management:
– BlackRock: $9 trillion
– Fidelity: $4.5 trillion
– Franklin Templeton: $1.5 trillion
– Invesco: $1.5 trillion
– WisdomTree: $87 billion
– VanEck: $77.8 billion
– ProShares: $65 billion
– GlobalX: $51 billion
– Grayscale: $50 billion
– Bitwise: Over $1 billion
– Roundhill: Over $1 billion
Throwing more light on what an ETF is, Odunze explained that an ETF “is an investment vehicle traded like a stock, designed to track the performance of an underlying asset or index rather than a single company. Investors can gain exposure to the value of this underlying asset, such as gold or oil. ETFs are traded on traditional stock exchanges, and their value is expected to rise when the asset’s price increases and fall when it decreases.”
Odunze then provided answers to why BlockRock, Fidelity, and the other firms above want Bitcoin or crypto ETF. He pointed out that because buying actual cryptocurrencies can be complex, many investors prefer a simpler solution. “An ETF would make investing in crypto as straightforward as trading stocks”, he said, “Simplicity could attract a broader range of customers, and firms could generate fees from an asset in high demand.”
But in the long run, is an ETF really good for the crypto market, or is this all buzz that will eventually fade out? Odunze thinks this is not just some buzz. “Let’s take gold as an example. The first gold ETF was listed on the New York Stock Exchange in November 2004. In the initial days, it attracted over $1 billion in inflows. Within a few years, the price of gold reached record highs; the SPDR Gold Shares became the world’s largest ETF, [and there was] mainstream acceptance.” Sniffing a bullrun, he observed that “[m]any speculate that the introduction of a Bitcoin ETF could serve as a sign of the next crypto bull run.”
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SEC Chairman’s Stance on Bitcoin ETFs
SEC Chairman Gary Gensler recently confirmed ongoing reviews of numerous Bitcoin spot ETF applications, hinting at the regulator’s commitment to ensuring these products are registered and undergo a thorough review process. Gensler emphasized that the SEC’s staff, known as the Disclosure Review Team, provides feedback to potential issuers in a time-tested process.
However, Gensler didn’t provide specifics about Grayscale Investments’ situation or whether the SEC would approve one ETF or all within a group if approval is granted. This lack of clarity leaves the crypto market waiting for further developments.
BlackRock ETF’s Potential Impact on Bitcoin’s Valuation
Anthony Scaramucci, the founder of SkyBridge Capital, has implied potential implications for the BlackRock ETF approval. He implies that this could cause the value of BTC to go 11× and bring in $100 billion in institutional investments. This will turn BTC into a $600 trillion asset.
Legal Perspective on Bitcoin ETF Approval
In response to Commissioner Hester Peirce’s expression of confusion regarding the SEC’s decision on a Bitcoin ETF, lawyer John E Deaton of Crypto-Law US, shares his perspective. Deaton suggests that approval might occur before the year’s end or at the latest, by the close of the first quarter of 2024.
Peirce’s stance, as a proponent of a spot Bitcoin ETF, underscores the uncertainty surrounding the SEC’s timeline for approval and the influence of ongoing court cases on this decision.
Bitcoin Performance and Expectation
In the year-to-date, the recent surge in BTC price has pushed it more than 100%, a development that has raised optimism among crypto enthusiasts.
After the surge in BTC price, it’s important to note that MicroStrategy, a known player in the corporate crypto realm has seen their BTC holdings become profitable again. The company had bought 158,245 BTC at $29,582 per coin. The recent increase in price has brought their investment back into profit.
Crypto Analyst, Kevin Svenson believes that the crypto winter is now over and even predicts that BTC could surpass the $70,000 mark. He bases this prediction on data-driven insights and significant market shifts, which raise expectations for a trend in BTC’s value.
As of now, BTC is priced at $34,000, representing a 20% increase over the seven days. On the weekly timeframe, the RSI value stands at 83.62 with a support level for BTC set at $32,000. If this support level holds steady it could indicate an upside for BTC.
Credit: Solomon Victor is a Technical Analyst who is also knowledgeable about various aspects of blockchain and cryptocurrency.