(Bloomberg) — Bitcoin continues its impressive rally, driven by expectations of increased demand from exchange-traded funds. The cryptocurrency has reached its highest price since May of last year.
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The largest digital asset saw a surge of 11.5%, surpassing $35,000 and currently trading at $34,580 as of 10:54 a.m. in Singapore on Tuesday. This marks a year-to-date rebound of 109% from the digital-asset rout experienced in 2022.
The potential approval of the first US spot Bitcoin ETFs in the coming weeks has triggered speculative excitement over the token. Industry giants such as BlackRock Inc. and Fidelity Investments are competing to offer these products. Supporters of digital assets argue that the ETFs will lead to wider adoption of the cryptocurrency.
A US federal appeals court on Monday formally recognized Grayscale Investments LLC’s victory in its pursuit to create a spot Bitcoin ETF, despite objections from the US Securities and Exchange Commission.
Read more: Grayscale Gets Court Order in Fight With SEC on Bitcoin ETF
Up until now, the SEC has been resistant to approving ETFs investing directly in Bitcoin, citing potential risks such as fraud and market manipulation. However, the court ruling and the applications from major investment firms have sparked speculation that the agency might change its stance.
ETF Ticker
Bloomberg Intelligence ETF analyst Eric Balchunas noted on X (formerly known as Twitter) that the iShares Bitcoin Trust, managed by BlackRock, has been listed on the DTCC (Depository Trust and Clearing Corporation) with the ticker IBTC.
“This doesn’t mean it’s technically approved,” Balchunas clarified in an interview. “There are still hurdles to overcome. However, this is essentially fulfilling all the requirements prior to launching an ETF. When we see a ticker added, it usually indicates that a launch is imminent.”
Bitcoin experienced a 10% surge last week due to ETF hype. On that occasion, the rally was caused by an erroneous report claiming that BlackRock had received approval to launch a fund. Once the mistake was revealed, the rally cooled down.
Ether, the second-largest cryptocurrency, also jumped 7% to surpass $1,800 in the wake of Bitcoin’s surge. Other smaller coins like BNB, XRP, and the meme-favorite Dogecoin also saw gains.
SEC Clampdown
The SEC has already approved ETFs that hold Bitcoin and Ether futures. However, the agency has intensified its crackdown on the crypto market following last year’s market crash and incidents like the bankruptcy of FTX exchange, which led to the ongoing trial of co-founder Sam Bankman-Fried on fraud charges.
Bloomberg Intelligence analysts Elliott Stein and James Seyffart believe that the “approval of a spot Bitcoin ETF seems inevitable” and anticipate that a batch of funds will be given the green light, although the timing remains uncertain.
Bitcoin is still below its pandemic-era peak of nearly $69,000 in 2021, as rising interest rates have dampened demand for risky assets. The cryptocurrency’s correlations with stocks, bonds, and gold have recently weakened, raising questions about mainstream investors’ level of engagement.
“Liquidity has improved somewhat compared to before,” said Justin d’Anethan, head of business development in the Asia Pacific at crypto market maker Keyrock. “Prices have now recovered, bringing some level of liquidity back. However, it is a far cry from the euphoria experienced in 2020-2021.”
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