Bitcoin soared 10 percent to one-and-a-half-year highs on Monday, October 23, and crypto-linked stocks followed it higher as speculation about the possibility of a bitcoin exchange-traded fund (ETF) drove enthusiasm about the sector and prompted short-sellers to quit positions.
The world’s biggest cryptocurrency was last at $32,833 after trading as high as $34,283. Crypto-related shares such as exchange Coinbase Global, miner Marathon Digital bitcoin holder MicroStrategy rose sharply and were making further gains in after-hours United States trade.
Smaller rival ether also surged 6 percent, hitting a two-month high and breaking above its 200-day moving average.
Anticipation Increases
Anticipation of a bitcoin ETF has grown after reports this month, including from Reuters, that the US Securities and Exchange Commission (SEC) won’t appeal a ruling it was wrong to reject an application from Grayscale Investments.
The prospect of a spot bitcoin ETF is seen driving broader flows into the cryptocurrency, as it would allow a wider set of investors to buy exposure without directly trading it.
“The market is doing its best to front-run the approval of a physical BTC ETF, with consensus being that it will happen some time in the next three months, if not sooner,” said Matthew Dibb, CIO at crypto asset manager Astronaut Capital.
BlackRock, VanEck, WisdomTree, Fidelity, Bitwise and Invesco all have pending bitcoin ETF applications. Blackrock’s iShares ETF is on a list of ETFs on the website of clearing house DTCC, driving the most recent round of speculation that its approval is imminent.
It was not clear when or why the ETF was on the list. DTCC and BlackRock did not immediately respond to requests for comment by phone and email. Last week BlackRock denied an erroneous report that the ETF was approved and sources close to the SEC confirmed the application was still pending.
The SEC did not immediately respond to a request for comment emailed after business hours on Monday.
Geopolitical Risks
Dibb also pointed to data on cyrptocurrency derivatives analytics platform Coinglass, which showed heavy liquidation of bitcoin short positions in the past 24 hours.
The move also comes as concern ripples through the broader markets about the risk of Israel’s war with the Islamist group Hamas becoming a wider regional conflict.
“We have seen recent geopolitical tensions drive demand for scarce assets, including both physical gold and bitcoin, which many investors view as digital gold,” said Zach Pandl, managing director of research at Grayscale Investments, a crypto asset manager.
“Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!” Click here!
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
Download The Mint News App to get Daily Market Updates.
Updated: 24 Oct 2023, 07:20 AM IST