In recent months, bitcoin (BTC) has shown remarkable momentum reaching the $30,000 mark twice. But crossing this milestone, which the flagship crypto has not maintained until now, is particularly exceptional. Here, in these lines, is a summary of the factors behind the return to favor of the most popular asset in the crypto ecosystem.
Investor optimism
The price of bitcoin (BTC) is currently around $34,048, up 0.05% over the last 24 hours for a weekly increase of 15%! This data shows how much the crypto phase is on fire in recent days.
Several factors explain this return to grace of the queen of cryptos. The first is attributed to a wave of optimism on the part of investors. The latter itself being closely correlated with an increase in trading volumes on the spot bitcoin markets.
Experts believe this is a result of growing enthusiasm over the possible emergence of a spot bitcoin exchange-traded fund (ETF). Especially since more and more signs seem to confirm the realization of this perspective.
The prospect of a bitcoin spot ETF being approved
Recently becoming the first Bitcoin ETF to be listed by the DTCC, BlackRock’s iShares Bitcoin Trust confirmed the possible emergence of a spot Bitcoin ETF. A perspective linked to the increased interest of institutions in bitcoin. This, despite a difficult global economic context.
As a reminder, the possible approval of a spot ETF has significant implications for bitcoin. Analysts estimate that if approved, the market capitalization of the flagship crypto could increase by $1 trillion.
This, for an increase in the price of the asset, of 74% during the first year following the launch of a spot ETF on bitcoin. We better understand why the Crypto Fear and Greed index is at its highest level since November 2021. A date on which the asset reached its price record of $69,789.
The strong bullish sentiment in the market
Experts agree that institutional demand for a spot Bitcoin ETF has never been stronger. For Diogo Monica, co-founder of Anchorage Digital, the question is not “if,” but “when” the SEC will approve a Bitcoin spot ETF.
It should be noted that a spot ETF would provide a regulated and easily accessible route for exposure to bitcoin. Which would mean significant institutional trust across the entire crypto ecosystem.
It is estimated that if the SEC allows it, a Bitcoin ETF would lead to increased demand for BTC from registered investment advisors (RIAs). Ditto for the asset management behemoths.
ARK Invest CEO Cathie Wood expects a one-time approval of the Bitcoin ETF later this year or in early 2024. Sentiment across the industry is therefore strong, reflecting growing confidence in the institutional adoption of bitcoin. In summary, the current surge in the price of the queen of cryptos is due to a confluence of all of these factors.
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