Bitcoin Price Surges Amid Anticipation for Spot BTC ETF Approval
Summary:
Bitcoin's price saw an increase, surpassing the $42,866 mark following a dip. The rise, depicting traders' bullish outlook, comes amidst the sale of $4 billion BTC in two days. The market anticipates a spot BTC exchange-traded fund (ETF) approval in January 2024, which is mirrored in substantial cash inflows from institutional investors. The price surge also points towards investors' diminishing fear concerning centralized exchanges. Despite macroeconomic challenges, Bitcoin's value continues to climb, with a year-to-date gain of 153.5%. Furthermore, institutional investors have funneled over $1.8 billion into crypto in the past year.
The price of Bitcoin (BTC) has risen today, reaching a peak of $42,866 after a low point of $40,300 was recorded over the weekend. This upward movement indicates traders' persistent optimistic outlook for Bitcoin, which had its highest November results since 2020 and continues on a positive trend this December. Notably, Bitcoin's bounce back beyond the $42,000 mark occurs in the midst of $4 billion BTC being sold within two days, marking an 18-month high.
This resurgence might shed light on the market's anticipation for a spot BTC exchange-traded fund (ETF) to be approved in January 2024, with substantial cash investments from institutional investors mirroring these expectations. Following Bitcoin's highest monthly close in 19 months, let's delve into why its prices are on the rise today.
Initially, mixed messages were sent out about Bitcoin's price after Changpeng “CZ” Zhao, the previous CEO of Binance, confessed to his guilt, and the exchange agreed to resolve a $4.3 billion settlement with the U.S. Department of Justice (DOJ) on November 21. However, as the dust settled, it was noticed that Binance didn't experience substantial withdrawal of funds like FTX did when it first went public about its liquidity crisis. Renowned figures in the crypto market, such as Mike Novogratz, CEO of Galaxy Digital, consider the settlement to be overall beneficial.
In light of such developments, fear concerning centralized exchanges seems to have almost completely dissipated. Trading volume for Bitcoin on exchanges reached a peak for the past 6 months on December 11. Although December 10 saw the lowest volume for the month, BTC trading surged, accounting for over $16.4 billion within the next 24 hours.
Despite macroeconomic challenges, Bitcoin's price continues its upward trend, recording a year-to-date gain of 153.5% with increasing volatility. Several Bitcoin analysts hypothesize that the Binance-DOJ settlement could pave the way for approval of a spot Bitcoin ETF. With expectations of such an approval, hodling currently constitutes 70% of the total available Bitcoin supply.
BTC has given more than twice the returns of gold in 2023, leading some to predict a rebound to $50,000. This positive sentiment saw the BTC market cap overtake Berkshire Hathaway on December 5 and maintain its status as the 10th largest asset. However, despite a host of applicants, the United States Securities and Exchange Commission (SEC) has declined approval for a spot Bitcoin ETF.
Reports suggest that such an approval could spur $600 billion in new demand. Analysts at CryptoQuant believe that an ETF approval could result in a $1 trillion increase in Bitcoin’s market capitalization. Galaxy Digital forecasts a 74% price rise in the first year following a spot BTC ETF launch. The SEC's next opportunity to approve a spot Bitcoin ETF falls between January 5 and 10.
In the last year, institutional investors have funneled over $1.8 billion into crypto, marking the 11th consecutive week of such inflows. Of this total, more than $1.7 billion have been invested in Bitcoin alone. Last week, Bitcoin accounted for $39.9 million of institutional inflow.
This news piece does not offer investment advice or recommendations. Every investment and trading move is risky, and readers should undertake their own inquiries when making a decision.
Published At
12/13/2023 11:31:23 PM
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