As most altcoins struggle to keep up, what caused this sudden spike in Bitcoin price?
The price of Bitcoin has surpassed the threshold of $35,000. In other words, BTC is up almost 11% in the last 24 hours and, more broadly, 107.6% since the beginning of the year.
The price of Bitcoin skyrocketed last night, to the point of briefly exceeding the $35,000 threshold. a point that the king of cryptocurrencies had not reached since May 2022, that is, at the time of the fall of Terra (LUNA).
Bitcoin Price Soared Overnight
The price of Bitcoin has increased by 10.5% in 24 hours, and more than 20% in 7 days. Considering the progression of BTC since the beginning of this year, it has seen an increase of around 105%. For its part, Ether, although it has also risen (7% in 24 hours), is struggling to align with the progression of Bitcoin. This is particularly notable because the ETH/BTC pair, in which Ether had already lagged for a while.
This difference can also be observed in the altcoin market. Bitcoin dominance, which allows us to assess the weight of BTC capitalization compared to the rest of the market, exceeded 54.4%, although it had already reached its highest point 2 and a half years ago. 2 days ago (52.6%).
Finally, on the liquidation side, 400 million dollars were liquidated in the last 24 hours, of which 300 million were shorted, according to data from Coinglass.
The Reasons for the Sudden Increase
This progression seems to be mostly correlated to the narrative surrounding the upcoming arrival of a spot Bitcoin ETF on US soil. Yesterday two important news fueled investors’ expectations, which were already high.
First, the Court of Appeals orders the US Securities and Exchange Commission (SEC) to rule on the conversion of Grayscale Bitcoin Trust (GBTC) to a spot Bitcoin ETF. In other words, if the SEC wants to once again reject Grayscale’s application (a decision considered arbitrary and capricious by the Court), it will have to clearly explain its motivations.
Secondly, iShares Bitcoin Trust, the future Bitcoin spot ETF of the giant BlackRock, appeared on the website of the Depository Trust and Clearing Corporation (DTCC), an American organization that plays a key role in the financial sector, particularly in the areas clearing, settlement and deposit of securities. In theory, the addition of a ticker in the DTCC means the next start of trading for this or that asset. In other words, BlackRock expects its Bitcoin spot ETF to be approved soon.
Eric Balchunas, an analyst specializing in ETFs at Bloomberg, has this to say:
“[This] usually happens right before launch. It’s hard not to see this as a sign that approval is certain or imminent.”
Thus, the recent news demonstrates two things: on the one hand, this rise in Bitcoin indicates the extent to which investors are placing their expectations on the upcoming arrival of a spot Bitcoin ETF in the US. Second, a likely approval of a BTC spot ETF by the SEC has never been so close, a recipe that should work, but whose timing is difficult to predict.
According to some observers, the first Bitcoin ETF approved by the SEC could be in the coming weeks or even before the end of October for the most optimistic. James Seyffart and Elliott Stein, two analysts at Bloomberg Intelligence, stated that “the approval of a Bitcoin ETF seems inevitable.”
By Leonardo Pérez
