This week, cryptocurrency prices spiked higher on anticipation of the first spot bitcoin ETFs being approved by the SEC. Investors should be aware of the following.
Over the previous week, major cryptocurrencies have surged, with Bitcoin seeing a 9% increase in price (BTC 1.20%). According to statistics from S&P Global Market Intelligence, as of Friday’s closing, the fork token Bitcoin SV (BSV) was up 61.6%, Stacks (SOL 1.78%) was up 27.7%, and Solana (STX -5.37%) had gained 24.3% for the week.
The actions were prompted by growing hope in recent days over the imminent approval of new spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC).
Bitcoin and Major Cryptos Surge: What Triggered This Rally?,Bitcoin and Major Cryptos Surge: What Triggered This Rally?
Expectations are rising for the first-spot approvals of bitcoin ETFs.
Positive cryptocurrency stories that began to surface last Friday (October 13, 2023) served as a catalyst for this week’s surge. The SEC chose not to appeal a federal court’s August reversal of its judgement prohibiting cryptocurrency asset management Grayscale from turning its highly popular Grayscale Bitcoin Trust (GBTC 5.30%) into an exchange-traded fund (ETF)
according to sources who spoke with the cryptocurrency news site CoinDesk. If such reports are true, the court may make a ruling as early as the next week.
However, because this news is unique to bitcoin, how does it benefit cryptocurrencies as a whole? Because, like individual publicly traded equities instruments, shares of exchange-traded funds (ETFs) can be acquired via any brokerage company at any time throughout the trading day, making them a far more investor-friendly vehicle.
The adoption of all cryptocurrency asset classes by investors would increase if a spot ETF tracking the price of bitcoin were approved. Consequently, it would very likely cause hundreds of billions of dollars’ worth of extra liquidity to quickly pour into the market capitalizations of cryptocurrencies.
Looking ahead, once bitcoin ETFs are eventually legalised, the value of the whole crypto market may increase by a total of more than $1 trillion, according to a forecast released earlier this week by data analytics firm CryptoQuant.
What happens to Bitcoin ETFs next?
As it happens, this week saw the filing of updated registration statements by many ETF providers—including Grayscale, Blackrock, and Fidelity—for possible bitcoin ETFs. This action appears to have been prompted by the SEC’s decision not to appeal the federal court’s previous judgement.
In addition, a research study published by JPMorgan on Wednesday, October 18, 2023, states that although the exact date of any approvals is yet unknown, it is anticipated to occur in the next weeks.
The article also states that the earliest possible date for the first SEC approvals to come through is January 10, 2024, which is the last day by which the SEC must react to ARK Invest’s open application for its “21Shares” bitcoin ETF.
However, as liquidity is often one of the main factors determining a market’s direction, this week’s gains may be sustained in the near future as anticipation builds for the SEC’s first spot bitcoin approvals in the next months.
Bitcoin and Major Cryptos Surge: What Triggered This Rally?,Bitcoin and Major Cryptos Surge: What Triggered This Rally?,Bitcoin and Major Cryptos Surge: What Triggered This Rally?, Bitcoin Crypto news, Bitcoin News