Bitcoin is once again making headlines as it surges past the $35,000 mark, reaching a level not seen since May 2022. In just the past five days, the famously volatile cryptocurrency has surged by 20%, leaving investors and analysts intrigued by its resurgence.
Bitcoin’s meteoric rise this year, where it has more than doubled in value, can be attributed to a combination of factors. Chief among them is the growing excitement surrounding the possibility of acquiring bitcoin through exchange-traded funds (ETFs) that trade on well-established stock exchanges, rather than relying on the less-regulated and at times questionable crypto platforms like FTX and Binance.
The recent wave of enthusiasm can be largely attributed to the emergence of BlackRock’s bitcoin ETF on a list managed by the Depository Trust and Clearing Corp (DTCC). The DTCC, a Nasdaq-operated clearing house for stocks and ETFs, is a respected entity in the financial world, and its inclusion of the BlackRock ETF is seen as a significant development.
BlackRock had applied for the registration of a bitcoin spot ETF back in June, and the application is currently pending approval. As the world’s largest provider of ETFs, managing trillions of dollars in assets, the potential launch of a BlackRock bitcoin ETF adds a new layer of legitimacy to the cryptocurrency.
Samer Hasn, a market analyst at online brokerage XS.com, cautions that the listing in the DTCC doesn’t confirm the fund’s launch, but it does suggest BlackRock’s readiness to introduce the ETF in the near future. Other companies, including Grayscale Investments, have also sought approval to launch similar bitcoin ETFs.
It’s important to note that the U.S. Securities and Exchange Commission (SEC) had previously rejected Grayscale’s ETF application. However, in a significant turn of events, a three-judge panel for the DC Court of Appeals overruled the regulator’s decision in August, stating that the SEC had failed to adequately explain its rejection of the application. This legal development has provided a boost to cryptocurrencies throughout the summer.
Nonetheless, the SEC has yet to grant approval for the fund, and there are lingering concerns about the rapid ascent of bitcoin. Regulatory and legislative issues still cast a shadow over the market, and the resolution of these concerns remains uncertain as legal battles continue.
Another noteworthy factor contributing to bitcoin’s recent ascent is fear. In times of economic uncertainty, investors often turn to alternative assets to diversify their portfolios. Bitcoin, sometimes referred to as “digital gold,” has gained recognition as a digital safe haven. Investors view it as a means to diversify beyond traditional stocks and bonds, and its role as a store of value in uncertain times has become increasingly prominent.
As bitcoin continues to capture the spotlight, it remains to be seen how these various factors will shape its trajectory in the evolving world of cryptocurrency.