Shares of cryptocurrency-related firms are enjoying significant increases as the market closely monitors events surrounding the possible approval of a Bitcoin spot exchange-traded fund (ETF) for BlackRock by the U.S. Securities and Exchange Commission (SEC).
With Bitcoin surpassing $34,000 in value, the stock prices of Coinbase, Marathon Digital, and MicroStrategy increased by over 15%.
Why Is the Price of Bitcoin Rising?
The prospect of a Bitcoin spot ETF caused the cryptocurrency market to respond, and as a result, the price of Bitcoin rose dramatically—it even reached $35,000 at one time.
This anticipation started when the planned BlackRock ETF was listed on the website of the crucial U.S. market utility, the Depository Trust & Clearing Corp. (DTCC).
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“Authorised participants will have to buy Bitcoin if a spot ETF gets approved in order to create shares for an eventual ETF, which will result in significant flows to buy an increasingly illiquid supply of Bitcoin,” says James Butterfill, head of research at CoinShares.
Players with High Exposure Gain Benefits
The whole financial industry was impacted by the surge in Bitcoin prices. The financial services company Galaxy Digital, Coinbase, and MicroStrategy also saw increases in their stock prices; MicroStrategy’s balance sheet already showed more than 158,000 Bitcoin.
SEC and BlackRock: A Future Resolution
Long-term hopes have been building for the establishment of a Bitcoin spot ETF, especially after major financial institutions like BlackRock applied to the SEC.
“If Bitcoin’s rally extends as far as $40,000, there will be a significant shift in investors’ outlook for Bitcoin,” stated James Butterfill. He added a word of caution in response. “Any damage to the early ’24 timeline for Spot ETFs could negatively affect prices, and we might find ourselves back in the high 20s.” Nevertheless, this possibility appears implausible in light of recent occurrences.”
In response to the doubts around the Bitcoin spot ETF, the market moved quickly. The withdrawal of BlackRock’s iShares Bitcoin Trust ticker $IBTC from the DTCC list on its website created a flurry of FUD (Fear, Uncertainty, Doubt), which led the price of bitcoin to plunge 3% in the minutes that followed Butterfill’s warning.
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