Bitcoin and other cryptocurrencies experienced a significant surge on Tuesday, fueled by hopes that regulators in the United States will soon give their approval for the first spot Bitcoin exchange-traded fund (ETF). This anticipation has played a crucial role in driving the latest rally in the crypto market.
Over the past 24 hours, the price of Bitcoin has climbed by 5% to reach $43,000. This marks its highest level in over a week, following a slight decline to around $40,000 in previous days. While Bitcoin hasn't yet reached its recent peak of over $44,000, which was recorded in April 2022, it has still managed to gain more than 50% since mid-October.
According to Alex Kuptsikevich, an analyst at broker FxPro, the intraday charts indicate that Bitcoin has formed a double bottom, suggesting that there is no immediate indication of a deeper correction in the market.
The rise in Bitcoin's value can be attributed to the combination of limited token supply and a supportive macro environment. Additionally, it has gained alongside the Dow Jones Industrial Average and S&P 500, as market participants anticipate lower interest rates. However, the main driver behind this recent rally remains the expectation of the first spot Bitcoin ETF approval.
Traders have been eagerly awaiting the decision by the Securities and Exchange Commission (SEC) on whether to approve the first spot Bitcoin ETF in the U.S., which would allow investors to hold Bitcoin directly. This approval is expected to generate significant interest from new investors. This week, hopes for ETF approval were reignited after BlackRock, which initially sparked this wave of gains when it filed for a fund during the summer, modified its application in a manner that addressed SEC concerns.
The overall sentiment in the crypto market remains optimistic as investors eagerly await the SEC's decision on the first spot Bitcoin ETF. The potential approval of this ETF could open up new opportunities and further fuel the ongoing rally in Bitcoin and other cryptocurrencies.
BlackRock Update on Baskets and Bitcoin
BlackRock, the global investment management corporation, has provided an update on its exchange-traded fund (ETF) application. The company states that it will issue and redeem Baskets of its ETF in exchange for cash. While there is a possibility of also using Bitcoin for these transactions, it is subject to approval from regulators.
This news comes at a critical time for the cryptocurrency market, particularly Bitcoin, which recently experienced a decline due to profit-taking. Additionally, there is anticipation surrounding the SEC's decision on a Bitcoin ETF application from ARK and 21Shares, with deadlines fast approaching.
Despite the long-awaited introduction of spot Bitcoin ETFs, there are concerns that their approval may result in a "sell the news" scenario, potentially limiting price gains. However, for now, the concept of Bitcoin ETFs continues to be a hot topic among cryptocurrency enthusiasts.
In addition to Bitcoin's performance, Ether, the second-largest token, has seen a 5% increase, reaching $2,240. Other altcoins such as Cardano have also experienced growth, climbing 7%, while Polygon has risen by 3%. Memecoins like Dogecoin have also shown strength, with a 5% increase, while Shiba Inu has gained 7%.
As the cryptocurrency market evolves, BlackRock's update sheds light on their approach to Baskets and potential Bitcoin involvement. It remains to be seen how regulators will respond to these developments.