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Bitcoin experienced a remarkable 10% surge on Monday, reaching its highest level in a year and a half. This significant rally was driven by mounting speculation surrounding the potential launch of a Bitcoin exchange-traded fund (ETF). This speculation led short-sellers to exit their positions, further boosting Bitcoin’s value. The cryptocurrency reached a peak of $34,283 before settling at $32,833.
The surge in Bitcoin’s value also had a positive ripple effect on crypto-related stocks. Shares of Coinbase Global (COIN.O), mining company Marathon Digital (MARA.O), and Bitcoin holder MicroStrategy (MSTR.O) all witnessed substantial increases and continued to make gains in after-hours trading.
Additionally, Bitcoin’s smaller counterpart, Ethereum (ETH), saw a 6% surge, reaching a two-month high and surpassing its 200-day moving average.
The anticipation of a Bitcoin exchange-traded fund (ETF) has been on the rise, particularly following reports, including one from Reuters, indicating that the U.S. Securities and Exchange Commission (SEC) would not appeal a decision deeming it incorrect to reject an ETF application from Grayscale Investments.
The potential approval of a spot Bitcoin ETF is expected to drive increased investment into the cryptocurrency, as it would offer a broader range of investors the opportunity to gain exposure to Bitcoin without the need for direct trading. According to Matthew Dibb, CIO at crypto asset manager Astronaut Capital, “The market is doing its best to front-run the approval of a physical BTC ETF, with consensus being that it will happen some time in the next three months, if not sooner.”
Several major financial institutions, including BlackRock (BLK.N), VanEck, WisdomTree (WT.N), Fidelity, Bitwise, and Invesco (IVZ.N), have pending Bitcoin ETF applications. The appearance of BlackRock’s iShares ETF on the clearing house DTCC’s list of ETFs has sparked speculation about imminent approval, although the reasons behind its inclusion were unclear. BlackRock and DTCC had not provided immediate responses to inquiries regarding this matter.
It’s worth noting that the SEC had previously denied an erroneous report suggesting ETF approval, and sources close to the SEC have affirmed that the application remains pending. The SEC had not responded to a request for comment at the time of reporting.
Moreover, data from the cryptocurrency derivatives analytics platform Coinglass indicated a significant liquidation of Bitcoin short positions within the past 24 hours.
This surge in Bitcoin’s value coincides with growing concerns in the broader financial markets regarding the risk of the Israel-Hamas conflict expanding into a wider regional crisis. Zach Pandl, managing director of research at Grayscale Investments, noted, “We have seen recent geopolitical tensions drive demand for scarce assets, including both physical gold and Bitcoin, which many investors view as digital gold.”
The cryptocurrency market continues to be dynamic, with ETF speculation and geopolitical factors playing a significant role in its recent movements.
