Last week, Bitcoin surged to its highest point since April, fueling excitement among traders who are hopeful for the approval of a spot Bitcoin ETF. This optimism stems from recent applications submitted by various companies, including BlackRock, a prominent player in the financial industry.
According to CoinMetrics, the price of the leading cryptocurrency reached a peak of $30,749.45, marking its highest point since April 14. However, by 6:39 p.m. ET, the price had slightly dipped to $29,988.46.
Despite the negative sentiment surrounding the crypto market lately, with FTX’s collapse and subsequent regulatory consequences, investors are increasingly optimistic about the involvement of major institutional names such as BlackRock in the digital asset space.
Vijay Ayyar, the head of international markets at CoinDCX, India’s largest cryptocurrency exchange, expressed his views on the recent developments. “The announcements of spot bitcoin ETF applications by prominent institutions have undoubtedly revitalized confidence in the crypto markets,” he said. “We also experienced significant support at the $25K level for BTC. The recent price surge has been driven primarily by spot buying rather than short liquidation, which indicates a healthier market.”
Analyzing the market structure, Ayyar pointed out that Bitcoin broke a significant downtrend that had persisted since April, lasting for approximately two months. As a result, many traders anticipate the cryptocurrency to test the $32,000 level at the very least. Surpassing this level would open the path toward $36,000 and potentially even $45,000 to $48,000.
BlackRock, in collaboration with Coinbase, filed an application for a spot Bitcoin ETF, which would enable investors to gain exposure to Bitcoin’s underlying market price without directly owning the asset. Coinbase, a major U.S. cryptocurrency exchange, serves as the custodian for the proposed BlackRock ETF. However, Coinbase has been facing regulatory pressure from the SEC, adding to its recent challenges.
Following BlackRock’s announcement, several other asset management companies, such as Valkyrie and WisdomTree, also submitted their applications for a Bitcoin ETF.
Meanwhile, investors remain attentive to macroeconomic indicators, seeking insights into the direction of the crypto market. Historically, digital coins have exhibited a correlation with broader financial markets, often tracking the performance of U.S. equity markets. Consequently, investors monitor inflation data and the overall economic health as indicators for Bitcoin’s potential future movements.
Ayyar acknowledged this dynamic, stating, “Overall, crypto has been trailing behind traditional equity markets. Therefore, this recent surge can be seen as a catch-up move in a sense.”
This positive development in the price of BTC is likely to be a tailwind for companies such as Bit Mining Ltd. (NYSE: BTCM), which focus on mining Bitcoin and other cryptos.
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