Investors hopeful as Bitcoin reaches highest value in 18 months

WEB DESK: Bitcoin saw a significant 6 per cent jump on Tuesday, reaching $35,198, its highest value in 18 months. This surge followed a notable 10 per cent increase on Monday, marking Bitcoin’s best performance in nearly a year.

This positive momentum not only affected Bitcoin but also influenced the wider cryptocurrency market and related stocks.

The surge in Bitcoin’s value is largely linked to growing speculation about the U.S. Securities and Exchange Commission’s (SEC) potentially approving a Bitcoin exchange-traded fund (ETF). If greenlit, this ETF would handle Bitcoin investments on behalf of fund investors, likely boosting demand.

The optimism stems from the idea that a Bitcoin ETF would offer a way for cautious investors to access cryptocurrencies via the stock market, potentially bringing in new investments.

Despite Bitcoin’s well-known volatility, its price has doubled since the beginning of this year. At the time of reporting, Bitcoin was up by 3.2 per cent to $34,129.

Additionally, Ether, the second-largest cryptocurrency, reached its highest value since August, indicating a positive trend in the broader cryptocurrency market.

This positive momentum also affected stocks related to cryptocurrencies, such as major U.S. exchange Coinbase Global (COIN.O) and Bitcoin owner MicroStrategy (MSTR.O), both experiencing significant gains in after-hours trading.

Notably, BlackRock (BLK.N), a major U.S. financial firm, is among several companies awaiting approval for Bitcoin ETF applications. Speculation about these approvals intensified when BlackRock’s iShares ETF appeared on the website of clearing house DTCC.

However, the reasons and timing behind this listing remain unclear, as both DTCC and BlackRock have not commented on the matter.

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Anticipation for ETF approval increased after reports, including from Reuters, suggested that the SEC would not contest a court ruling that deemed its rejection of an ETF application from crypto firm Grayscale Investments as incorrect.

Geoffrey Kendrick, Standard Chartered’s Head of Digital Assets Research, noted, “The SEC being pressured by the courts increases the probability” of ETF approval.

It’s crucial to note that BlackRock clarified last week that its ETF had not received approval, dispelling an erroneous report.

Data from the crypto derivatives analysis site Coinglass showed significant short-covering activities related to Bitcoin in the last 24 hours, indicating the market’s anticipation and activity regarding potential developments in the cryptocurrency space.