- Bitcoin reaches a 21-month high at $46,924.38, amidst anticipation for potential approval of a U.S. bitcoin exchange-traded fund.
- Multiple financial giants, including BlackRock and Grayscale, submitted final updates to the U.S. Securities and Exchange Commission, strengthening the belief in an imminent ETF approval.
Bitcoin’s rally to a 21-month high at $46,924.38 has ignited a fervour among investors, fueled by the imminent possibility of a U.S. bitcoin exchange-traded fund (ETF) approval. The anticipation soared as key industry players, such as BlackRock and Grayscale, finalized critical updates to the U.S. Securities and Exchange Commission (SEC). These updates, particularly the disclosed fees, bolstered investor confidence, propelling Bitcoin’s value and reinforcing the belief that an ETF approval is on the horizon.
Amidst this surge, notable industry expert Jim Angel, an associate professor specializing in financial market structure at Georgetown University’s McDonough School of Business, describes the current scenario as a “price war.” He emphasizes that the competition among various vendors hinges predominantly on offering a nearly identical commoditized product but at competitive prices.
Regulatory Milestone: Implications of a Potential ETF Approval
In the regulatory realm, the SEC faces its first deadline to greenlight or reject the Ark 21Shares ETF application on Wednesday. Observers widely anticipate the agency to approve multiple applications simultaneously, aiming to level the competitive landscape. Former SEC chair Jay Clayton weighed in on CNBC’s “Squawk Box,” expressing a firm belief that approval is inevitable. He asserts that there are no substantial issues left undecided, considering it a significant milestone not just for Bitcoin but for the broader financial sector.
This impending decision holds monumental significance for the cryptocurrency domain, characterized by its anti-establishment roots. However, it has effectively showcased the value of Bitcoin and Ether to institutional investors. Noteworthy financial entities such as Fidelity, Invesco, VanEck, WisdomTree, Franklin Templeton, and BlackRock are among those eager to launch a Bitcoin ETF, underscoring the evolving acceptance of cryptocurrencies in traditional finance.
Bitcoin’s upward trajectory coincides with a decline in bond yields, with the 10-year Treasury note losing nearly 4 basis points on Monday. This positive sentiment around Bitcoin also propelled Ether by 4%, echoing the optimism among firms eyeing a potential spot Ether ETF launch.
Amidst this positive trend, crypto equities experienced a surge as well. Coinbase, a prominent name, witnessed a 3.5% increase. Mining entities such as Riot Platforms, Marathon Digital, Iris Energy, and CleanSpark showcased substantial gains, further emphasizing the market’s anticipation for positive regulatory decisions.
Many investors speculate that while the initial impact of an ETF approval might be overestimated, the event itself will pave the way for increased institutional investments in Bitcoin, potentially reshaping its trajectory for the long term.
Galaxy Digital, in collaboration with Invesco for its proposed Bitcoin ETF, projects a colossal addressable market of approximately $14 trillion within the first year post-launch, expanding significantly to $26 trillion in the second year and $39 trillion in the third year.
