It looks like the market has finally caught up with the news and reacted the way most expected.
The Bitcoin price rose more than 7% in the last 24 hours, a move that resulted in a wave of selloffs, most of which were unsurprisingly short.
Interestingly, this comes at a time of considerable uncertainty in the United States in terms of regulatory clarity. The SEC recently filed two lawsuits against the world’s leading cryptocurrency exchanges: Binance and Coinbase, alleging that both violated securities laws.
So why is the price of Bitcoin rising? Well below are three possible reasons.
BlackRock Applied for a Bitcoin ETF
BlackRock is the world’s largest asset manager and has taken a big step towards legitimizing Bitcoin as an asset class worth investing in. The company filed for a spot Bitcoin Exchange Traded Fund (ETF) with the United States Securities and Exchange Commission.
While this may sound like an old story, there is one worthwhile difference between BlackRock and every other company that has applied for a spot Bitcoin ETF thus far. The former has an ETF success rate with the SEC of 575 to 1.
That’s how it is. BlackRock has filed 576 applications and only one of them was denied. And it was almost a decade ago.
Needless to say, an approved Bitcoin spot ETF is expected to have considerable industry-wide implications, as it would legitimize the asset and allow institutional investors to get involved without the underlying concerns they currently face.
More Bitcoin ETF Applications
This has given wings to other large companies to renew their efforts or start from scratch. WisdomTree, a global financial firm, is trying once again to start a spot Bitcoin ETF in the US. The filing came yesterday.
Invesco, another investment management firm with around $1.4 trillion in assets under management, has also reapplied for a spot BTC ETF. The company first filed with the SEC in 2021 along with Galaxy Digital.
It seems that BlackRock’s application has given a lot of hope for approval, thanks to the reputation, stature, and size of the company.
Wall Street-Backed Crypto Exchange EDX Goes Live
A cryptocurrency exchange called EDX, backed by Charles Schwab, Citadel Securities, and Fidelity Digital Assets, officially launched and began trading yesterday, according to recent CNBC coverage.
The exchange allows trading of select cryptocurrencies such as BTC, ETH, LTC, and BCH; none of these were called “crypto asset securities” in the recent lawsuit the US Securities and Exchange Commission filed against Coinbase and Binance.
Can the BTC Price Go Higher?
In their latest Bitfinex Alpha report, analysts at the popular exchange noted the resilience of the crypto market amid ongoing regulatory turmoil in the US. However, they also argued that despite the significant move higher, the price failed to generate a short contraction.
Bitcoin’s rapid rally last week from the all-important $25,000 barrier did not lead to a short squeeze, indicating that the price appreciation was not the result of short liquidations, but perhaps the result of sizable long futures positions that held the price up.
Bitfinex argues that if the bulls manage to continue driving the price higher, it could eventually trigger a short sell-off cascade, catapulting the price higher.
By Audy Castaneda
