Bitcoin hits US$35,000 for first time since 2022 on ETF bets

Bitcoin hits US$35,000 for first time since 2022 on ETF bets

NEW YORK - Bitcoin extended a rally fuelled by expectations of fresh demand from exchange-traded funds (ETFs), reaching the highest price since May 2022.

The world’s largest digital asset rose as much as 11.5 per cent to top US$35,000 and was trading at US$34,450 as at 5.20am in London on Tuesday, taking its year-to-date rebound from 2022’s digital asset rout to 108 per cent.

The possible approval in the coming weeks of the first US spot Bitcoin ETFs is stoking speculative ardour for the token. Asset managers BlackRock and Fidelity Investments are among those in the race to offer such products. Digital asset bulls argue that the ETFs will widen adoption of the cryptocurrency.

A US federal appeals court on Monday formalised a victory for Grayscale Investments in its bid to create a spot Bitcoin ETF over objections from the United States Securities and Exchange Commission (SEC).

The SEC has so far resisted allowing ETFs that invest directly in Bitcoin, citing risks such as fraud and manipulation in the underlying market. The applications from investment titans stoked speculation that the agency will relent.

ETF ticker

Bloomberg Intelligence ETF analyst Eric Balchunas flagged on X, the platform formerly known as Twitter, that the iShares Bitcoin Trust has been listed on the website of clearing house DTCC with the ticker “$IBTC”.

BlackRock, the world’s largest asset manager, operates the iShares business. The DTCC is the Depository Trust and Clearing Corp, which undertakes clearing and settlement in US markets.

“This doesn’t mean it’s technically approved,” Mr Balchunas said. “It’s not home free. But this is pretty much checking every box that you need to check before you launch an ETF. When we see a ticker added, those things are usually right before launch.”

Bitcoin surged 10 per cent intraday at the start of last week on ETF hype. On that occasion, an erroneous report that BlackRock had won approval to launch a fund caused the move and the rally cooled once the mistake came to light.

Ether, the second-largest token, jumped towards US$1,800 in Bitcoin’s slipstream on Tuesday, but the performance of other coins was mixed. For instance, Solana and meme favourite Dogecoin erased initial gains and declined.

SEC clampdown

The SEC has already allowed ETFs that hold Bitcoin and Ether futures. But the agency overall has intensified a crypto crackdown following 2022’s market crash and blow-ups like the bankruptcy of the FTX exchange, whose co-founder Sam Bankman-Fried is on trial for fraud.

Bloomberg Intelligence analysts have said the “approval of a spot Bitcoin ETF looks inevitable” and that a batch of funds is likely to be given the green light, although the timing remains uncertain.

Bitcoin remains below its pandemic-era, 2021 peak of almost US$69,000, squeezed by rising interest rates that hit demand for risky assets. The token’s correlations with assets such as stocks, bonds and gold have ebbed lately, stoking questions about whether mainstream investors have disengaged.

“Liquidity is somewhat better than before,” said Mr Justin d’Anethan, head of business development for Asia-Pacific at crypto market maker Keyrock. “Prices have now recuperated and with it, a certain amount of liquidity – still nothing compared with the euphoria of 2020-2021 though.” BLOOMBERG

Cue. (n.d.-a). Bitcoin hits US$35,000 for first time since 2022 on ETF bets. The Straits Times. https://www.straitstimes.com/business/bitcoin-rides-wave-of-etf-optimism-to-hit-highest-since-may-2022