Bitcoin soared to a 21-month peak, surpassing $47,000 at the week’s onset, with investors eagerly anticipating a potential U.S. bitcoin exchange-traded fund (ETF) approval.
Marking a 6% surge on Monday, the Bitcoin reached $46,924.38, as significant updates from BlackRock. Grayscale, and other potential bitcoin ETF issuers strengthened investor confidence. The updates included crucial fee disclosures, reinforcing the likelihood of approval.
Previously unseen since April 2022, Bitcoin’s peaked at $47,238.92, triggering a surge driven by a competitive “price war,” according to Jim Angel, an associate professor at Georgetown University’s McDonough School of Business.
The U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) faces a pivotal deadline to approve or reject the ETF application of Ark 21Shares on Wednesday. Experts anticipate a simultaneous approval of multiple applications to level the playing field.
Former SEC chair Jay Clayton expressed confidence in approval, stating it is “inevitable” and a significant advancement not only for bitcoin but for the broader financial landscape.
This potential landmark decision underscores the cryptocurrency industry’s evolution, with major firms such as Fidelity, Invesco, VanEck, WisdomTree, Franklin Templeton, and BlackRock seeking to launch bitcoin ETFs.
Bitcoin’s surge coincided with a decline in bond yields, causing a nearly 4 basis points loss on the 10-year Treasury note. Ether also benefited from the positive sentiment, rising by 4%, with similar firms eyeing spot ether ETFs.
The optimism surrounding bitcoin impacted related equities. With Coinbase gaining 3.5%, and miners like Riot Platforms, Marathon Digital, Iris Energy, and CleanSpark experiencing notable increases.
While some investors believe the initial impact of approval has been overstated. The event is seen as a catalyst for new institutional inflows into bitcoin. Galaxy Digital, collaborating with Invesco on a proposed bitcoin ETF, estimates a substantial market size. Reaching $14 trillion in the first year, expanding to $26 trillion in the second, and $39 trillion in the third year after launch.
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“This data underscores considerably stronger profitability in the mining sector compared to challenges experienced in 2022 and part of 2023.”
In approximately six months, Bitcoin undergo a “halving,” reducing the new bitcoins awarded to miners by half. Satoshi Nakamoto introduced this event in 2009 as an anti-inflationary measure. Occurring roughly every four years, the lead-up to halvings traditionally proves the most profitable time for crypto investors. “Buying bitcoin six months before a halving and selling 18 months after has historically outperformed a ‘buy and hold’ strategy,” affirms the analyst.
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