Quick summary
Bitcoin surged 10% on October 24, reaching its highest value since May 2022. Why Bitcoin is rising? Bitcoin’s price rise is driven by speculation around potential USA’s Securities and Exchange Commission (SEC) approval of a Bitcoin ETF and pending applications from major financial firms. Analysts predict further gains and a massive influx of institutional investors if ETF is approved. Ether, other cryptocurrencies and crypto related shares such as Coinbase and MicroStrategy also saw significant gains.
Bitcoin’s Peak: Reached an intraday high of $34,375.6 (Rs 28,42,793)
Significance: Highest value since May 2022
Bitcoin’s all time high price: $68,789.63 in Nov 2021
Key factors behind the surge
Speculation around Bitcoin ETF
- Anticipation: Growing speculation due to potential SEC approval of Bitcoin ETF. ETF (Exchange Traded Funds) are one of the major ways to invest money in the . If a Bitcoin ETF is approved, all the investors who have not yet directly purchased Bitcoins, will be able to participate in it’s price action.
- Previous Ruling: SEC may not appeal a ruling against its rejection of Grayscale Investments’ ETF application
- Impact: A spot bitcoin ETF could attract significant inflows, allowing participation without direct trading exposure.
Pending Bitcoin ETF applications
- Major Players: BlackRock, Fidelity, WisdomTree, and Invesco have applications pending with the SEC
- Resolutions expected within the next three months or sooner
BlackRock’s iShares ETF listing
- BlackRock’s iShares ETF listing was found on Depository Trust & Clearing Corporation’s (DTCC) website. It fuelled the Bitcoin price further. But within a few hours, the listing was removed! It is raising confusion in the mind of existing bitcoin investors.
Analysts and Experts’ Opinions
A new bull is coming to Wall Street. #Bitcoin pic.twitter.com/LVafCmdjRp
— Michael Saylor⚡️ (@saylor) October 24, 2023
- Potential Gains: Predictions of 20% and higher gains in Bitcoin upon immediate approval of a spot ETF
- Institutional Influx: Anticipation of a massive influx of institutional investors, predominantly into Bitcoin
- BlackRock CEO notes unprecedented client interest in diversifying portfolios with crypto
Ethereum and crypto related stocks rally
- Ether’s Rise: 6% increase, reaching a two-month high of $1,800
- Shares in the Green: Crypto-linked shares like Coinbase Global and MicroStrategy saw gains in after-hours trading
FAQs
What are Exchange Traded Funds?
An exchange-traded fund (ETF) is a type of investment security that tracks a particular index, sector, commodity, or other assets. ETFs are similar to mutual funds, but they can be purchased or sold on a stock exchange like a regular stock. The trading value of an ETF is based on the net asset value of the underlying stocks or assets, like Bitcoin, that an ETF represents.
What is Securities and Exchange Commission (SEC)?
The Securities and Exchange Commission (SEC) in the United States is a government agency that oversees and regulates the securities industry, which includes the stock and options exchanges. It approves what can or cannot be traded in public capital markets. It is similar to Securities and Exchange Board of India (SEBI) in India.
What impact could a spot Bitcoin ETF have?
A spot Bitcoin ETF is expected to attract significant inflows into the crypto space, allowing investors to participate without direct trading exposure, and potentially leading to a massive influx of institutional funds.
What are the predictions for Bitcoin’s future performance?
The crypto market is abuzz with anticipation, eagerly awaiting the SEC’s decisions on pending ETF applications. Analysts are predicting gains up to 20% or more in Bitcoin immediately following the approval of a spot ETF, followed by a substantial influx of institutional investors.
Are other cryptocurrencies also experiencing a surge?
Yes, Ether has also seen a significant increase, rising 6% to a two-month high of $1,800.
Which companies have pending Bitcoin ETF applications?
Major financial players such as BlackRock, Fidelity, WisdomTree, and Invesco have pending bitcoin ETF applications with the SEC.
Approval of a spot Bitcoin ETF could be a game-changer, signaling a new era of institutional participation in the crypto space.