Bitcoin’s price surged recently during today’s trading session, jumping over 10% and reaching the highest level in 2.5 years at $35,000. The driving force behind this significant increase in the world’s largest digital currency is speculation about the potential opening of a Bitcoin exchange-traded fund (ETF) – a reason that led Bitcoin short sellers to close their positions.
This time, Bitcoin surpassed a strong resistance at $32,800, nullifying a bearish signal and pushing the cryptocurrency above $35,000 for the first time since May 2022. Analysts suggest further increases to $40,000 if the price remains above $31,000, reflecting investors’ optimism.
The anticipation of the creation of a Bitcoin ETF is expected to attract substantial investment into this digital currency, providing investors with more opportunities to engage in Bitcoin without the need for direct transactions.
“The market is responding positively to expectations of the imminent establishment of a Bitcoin ETF. People believe that such a fund will be approved within the next three months, possibly even sooner,” said Matthew Dibb, Chief Investment Officer of digital asset management company Austronaut Capital, in an interview with Reuters.
Crypto analyst Michael van de Poppe expressed surprise at Bitcoin’s shift, stating, “We have a basis for optimism that Bitcoin will reach $40,000 this year.”
Another analyst, Crypto Rover, believes, “The possibility of a Bitcoin ETF being established by the end of this year will continue to support Bitcoin’s price in the short term, so Bitcoin could potentially rise to $48,000.”
The sharp increase in Bitcoin’s price is driven by new expectations regarding the approval of a Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC). The iShares Bitcoin Trust, managed by the $9 trillion asset manager BlackRock, has been listed on the DTCC website with the ticker $IBTC. According to Eric Balchunas, a senior ETF analyst at Bloomberg, this move is considered part of the process of bringing an ETF to the market.
So far, the SEC has allowed the opening of Bitcoin and Ethereum futures ETFs but has not approved the establishment of a spot Bitcoin ETF due to concerns about risks such as fraud and market manipulation. However, analysts believe that the applications from reputable and large companies to open spot Bitcoin ETFs will be a motivating factor for the SEC to reconsider its stance.
