Bitcoin Price Surges on Grayscale's Legal Victory, Institutional Interest Piques
Summary:
Bitcoin price surges 5% as Grayscale Bitcoin Trust (GBTC) wins its case against the SEC, generating institutional interest. Exchanges experience a decrease in BTC supply while liquidations lead to increased volatility. Despite bullish signs, overall market sentiment remains fearful. This article does not provide investment advice.
Bitcoin (BTC) has experienced a price surge of 5% today, reaching a two-week high above $28,000. This increase came after U.S. Court of Appeals Circuit Judge Neomi Rao ruled in favor of Grayscale Bitcoin Trust (GBTC) in their case against the U.S. Securities and Exchange Commission (SEC). The court's decision highlights the growing institutional interest in Bitcoin, with companies like BlackRock and Fidelity Investments scheduled to receive answers regarding their BTC spot ETFs on September 2.
The rally in Bitcoin price can be attributed to institutional interest. The rally began on August 29 when Judge Rao overturned the SEC's order to deny the GBTC spot ETF due to concerns of "fraud." While the spot ETF hasn't been approved, Judge Rao ruled that Grayscale's petition for review should be granted and the SEC's order should be vacated.
The SEC has been reluctant to approve a spot Bitcoin ETF, despite numerous applications from major players like BlackRock, Fidelity, Cathie Wood's ARK, and 21Shares. BlackRock, which manages over $8.5 trillion in assets, plans to use Coinbase for BTC custody in the trust. The SEC has a series of ETF decisions to make in September.
In addition to institutional interest, the supply of Bitcoin on exchanges is also decreasing, reaching its lowest level since January 2018. The market sees this reduction in exchange-held coins as a bullish signal, as it suggests investors are withdrawing Bitcoin to store it in self-custody for the long term. Interestingly, exchanges have been shedding Bitcoin since May 18, 2023, indicating that many investors are positioning themselves for a Bitcoin price rally.
Alongside the decrease in BTC supply on exchanges, liquidations have played a role in driving Bitcoin price higher. In the past 24 hours alone, more than $46.5 million worth of BTC shorts have been liquidated, contributing to over $100 million in shorts being liquidated across the crypto market. Despite this losing streak for short-sellers, 48% of the futures market remains short on Bitcoin price, potentially setting the stage for a short-squeeze and further upward movement.
Despite these positive indications, the overall market sentiment towards Bitcoin remains fearful, as shown by the Bitcoin Fear & Greed Index, which has dropped over 13 points compared to the previous month.
Please note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any financial decisions.
Published At
8/29/2023 5:24:59 PM
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