Bitcoin is making waves again, surging beyond the $35,000 mark for the first time since May 2022. This volatile cryptocurrency has more than doubled in value this year, as investors anticipate the availability of bitcoin funds on conventional stock exchanges, avoiding less-regulated crypto platforms. The recent buzz is due to BlackRock's bitcoin ETF being listed on the Depository Trust and Clearing Corp's controlled list, operated by Nasdaq for stocks and ETFs, as reported by Reuters.
However, market analysts like Samer Hasn at XS.com warn that the listing of BlackRock's ETF on the Depository Trust and Clearing Corp (DTCC) does not guarantee its immediate launch. It does, nonetheless, suggest that BlackRock might be gearing up to launch the ETF soon, adding to the optimism surrounding Bitcoin.
BlackRock is not the only player in this space, with other companies, including Grayscale Investments, also seeking approval to launch similar bitcoin ETFs.
Also Read: Bitcoin soars 10% to 2-1/2 year high
The surge in Bitcoin's price has caught the attention of traders and investors. Known cryptocurrency trader il Capo Of Crypto, who had bet against several alternative cryptocurrencies, expressed surprise at the ease with which Bitcoin broke the $31,000 resistance level. "This breakout is not good for the main bearish scenario," he noted.
Despite the optimism, it's essential to consider both sides of the coin. The CoinDesk Bitcoin Trend Indicator (BTI) has shifted to a "significant uptrend," reflecting the strength in Bitcoin's price action. However, ByteTree analysts warn of caution as they observe a significant drop in Bitcoin transaction numbers and economic throughput on the Bitcoin network.
In contrast to the bullish sentiment, they suggest that the price surge is driven primarily by positive news anticipation, which may not be the healthiest basis for the cryptocurrency's short-term performance.
Factors behind Bitcoin's upward momentum
The increase in Bitcoin's value is driven by rising demand due to expectations of Bitcoin ETF approval and listing. This surge is not only impacting Bitcoin but also related assets, like stocks in companies such as Coinbase (rising nearly 14 percent in intraday trading) and Riot Platforms, a crypto miner (up 14 percent). Ethereum (ETH), the second-largest cryptocurrency after Bitcoin, has similarly witnessed a 16 percent increase in value over the past five days. According to the Wall Street Journal, various factors are contributing to Bitcoin's upward momentum.
Two key developments are driving Bitcoin's recent price increase. First, a federal appeals court has told the Securities and Exchange Commission (SEC) to reconsider an application from Grayscale Investments, a crypto investment firm, to transform its Bitcoin trust into an exchange-traded fund (ETF). This suggests a higher likelihood of approval for such ETFs in the future.
Second, BlackRock, a major financial firm, has updated its application for a Bitcoin ETF, even though the SEC hasn't yet approved similar funds. The court's decision regarding Grayscale makes it more probable that BlackRock's ETF will eventually get the green light.
In summary, these are positive signs for the cryptocurrency market, driving up Bitcoin's value. According to Todd Groth, the head of research at CoinDesk Indices, their Bitcoin Trend Indicator (BTI) indicates a strong upward trend, suggesting that Bitcoin's strength could continue in the coming days and weeks. This means Bitcoin might keep rising in value.
Also Read: Bitcoin surges to 18-month high as hopes of SEC-approved ETF soar
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