Bitcoin Approaches 21-Month Peak Following U.S. Regulatory Nod for ETFs

Bitcoin remained stable on Thursday at its highest position since March of last year, following the approval by U.S. regulators of the nation’s first ETFs designed to follow the digital currency. This key decision could extend Bitcoin’s allure to a wider range of investors. On Wednesday, the Securities and Exchange Commission greenlit 11 applications from prominent firms like BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck.

By 0930 GMT on Thursday, three ETFs, one of which was created by BlackRock, had commenced trading, with more expected to go live as the day progressed. Bitcoin’s price was approximately $46,250, climbing by 0.6% for the day, sustaining the upswing prompted by the anticipation of these approvals earlier this week. This year, Bitcoin has surged nearly 9% and even reached $47,915 on Tuesday, a peak not seen since March of the prior year. Despite the market’s volatility and the downfall of key players like FTX in 2022, Bitcoin’s value more than doubled last year.

While spot bitcoin ETFs are already traded in other regions, such as Canada and Europe, they haven’t attracted significant investment. However, industry insiders are hopeful that these new U.S.-listed ETFs will spark a wave of Bitcoin demand. According to Nick Ruck, COO of ContentFi Labs, a blockchain company specializing in intellectual property licensing, retail, and institutional investors no longer need to rely on futures trading or self-custody to invest in Bitcoin, as they can now use traditional brokerage accounts. Ruck pointed out that Bitcoin’s fixed supply means additional market purchases will be necessary if ETFs need to acquire more to meet investor demand.

Attention within the sector is now shifting towards Ethereum, the second-largest cryptocurrency by market cap, which powers the Ethereum blockchain network. BlackRock has already submitted an application for a spot Ethereum ETF in November 2023. On Thursday, the price of Ether soared by as much as 4.4% to $2,638, its highest value since May of the previous year.