Bitcoin experienced a remarkable surge of nearly 10 percent on Tuesday, reaching $34,872, marking its highest value in almost a year and a half. This surge is primarily attributed to the growing anticipation of an imminent exchange-traded bitcoin fund.
The bullish momentum began with a 10 percent gain on Monday, making it Bitcoin's best day in nearly a year. The enthusiasm extended to the broader cryptocurrency market and positively impacted related stocks.
The key driver behind this optimism is the potential approval of a bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC).
A spot bitcoin ETF would offer previously cautious investors a way to access cryptocurrencies through the stock market, potentially attracting a fresh influx of capital into the sector. If such an ETF is given the green light, it is expected to boost demand significantly.
Also read: Crypto lender BlockFi emerges from bankruptcy
As of the latest data, Bitcoin's price is up by 7.87 percent, reaching $34,020, its highest level since May 2022, and it briefly exceeded $35,000 during Asian trading hours. The second-largest cryptocurrency, Ethereum (Ether), also witnessed a 4.50 percent increase, reaching $1,786.30, marking its highest value since August.
This surge in cryptocurrency prices had a positive impact on related stocks. Major U.S. exchange Coinbase Global saw more than 7 percent gain, while bitcoin owner MicroStrategy soared by over 12 percent.
There is a palpable sense of excitement in the cryptocurrency market, with many eagerly awaiting concrete developments from the SEC. Antoni Trenchev, co-founder of digital asset firm Nexo, expressed this sentiment, highlighting the importance of potential SEC actions.
Several major U.S. financial firms, including investment giant BlackRock, have pending applications for bitcoin ETFs. The anticipation of their approval was further fueled by the iShares ETF listing on the website of the clearing house DTCC, although the timing and reasons for this listing remain unclear.
Moreover, recent reports, including one from Reuters, suggest that the SEC will not appeal a court ruling that found the agency was wrong to reject an ETF application from crypto firm Grayscale Investments. This court ruling was formalized on Monday, sending the application back to the SEC for review, increasing the likelihood of ETF approval.
In the last 24 hours, data from the crypto derivatives analysis site Coinglass indicated significant short-covering activity in the bitcoin market, reflecting the growing optimism and positive sentiment surrounding the cryptocurrency.
(With inputs from Reuters)
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
