- Bitcoin and other cryptocurrencies rose on Tuesday with a new wave of hope that U.S. regulators will soon approve the first physically-backed Bitcoin exchange-traded fund (ETF).
- The price of Bitcoin rose 5% in the last 24 hours to $43,000, trading at the highest levels since the price dipped to $40,000 in the coming days.
- Bitcoin ETFs have long been awaited by crypto traders, but finally getting approval may not support prices as much as hoped and could create a ‘sell the news’ situation.
Bitcoin and cryptocurrencies advanced strongly on Tuesday on news from the US: Positive sentiment increases as the SEC’s decision date approaches.
Bitcoin Price Retook 43K Dollars Again
Bitcoin and cryptocurrencies made a strong move on Tuesday with a new wave of hope that U.S. regulators will soon approve the first physically-backed Bitcoin exchange-traded fund (ETF); this expectation has been one of the main driving forces behind the latest crypto rally.
The price of Bitcoin rose 5% in the last 24 hours to $43,000, trading at the highest levels since the price dipped to $40,000 in the coming days. The largest digital asset has yet to reach its peak above $44,000, the peak of a rally that has seen Bitcoin rise by more than 50% since mid-October.
Analyst Alex Kuptsikevich from FxPro stated, “Bitcoin has formed a double bottom on the intraday charts, and this dynamic shows that there is no sentiment for a deeper correction.” Tight token supply and a supportive macro framework have supported Bitcoin, which, along with low-interest expectations, gained with Dow Jones Industrial Average and S&P 500 in recent days. The main story of the rally has been a story in crypto language.
Investors have been expecting the U.S. Securities and Exchange Commission (SEC) to soon approve the first spot Bitcoin exchange-traded fund (ETF) in the U.S., expecting it to support Bitcoin and attract new investors. ETF hopes revived this week after BlackRock, which kick-started this wave of gains when it filed for a fund in the summer, updated its application this week following regulatory concerns raised by the SEC.
“Trust will issue and redeem baskets on a continuous basis and use cash. These transactions will occur in cash. Subject to regulatory approval, these transactions may also be done in Bitcoin,” detailed BlackRock in an update filed in a regulatory document late on Monday. The update in BlackRock’s application clarified that the ETF would initially issue and redeem shares of the fund in cash rather than digital assets, the underlying of the fund, because cash issuance and redemption are preferred by regulators.
Hopes rise as ETF deadline approaches
BlackRock’s update comes at just the right time for the crypto markets, with Bitcoin seeing a pullback among signs of profit-taking in recent days. With the SEC facing an ultimate deadline in early January to make a final decision on a Bitcoin ETF from ARK and 21Shares, the SEC’s shadow looms large, and there are more deadlines next month.
There are concerns that the long-awaited Bitcoin ETFs may not support prices as much as hoped when finally approved and could create a ‘sell the news’ situation. Nevertheless, at least in the short term, Bitcoin ETFs continue to be on the agenda for crypto bulls.
Beyond Bitcoin, the second-largest token, Ether, rose 5% to $2,240. Smaller tokens or alternative coins also rose; Cardano increased by 7%, and Polygon rose by 3%. Meme coins were similarly strong, with Dogecoin rising 5% and Shiba Inu increasing by 7%.
