Bitcoin maintained its position on Thursday near its highest level since March 2022 following the landmark approval of the first U.S.-listed exchange-traded funds (ETFs) tracking the cryptocurrency by the Securities and Exchange Commission (SEC). The SEC approved 11 applications, including those from BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck. Three of the ETFs, including BlackRock’s, began trading by 0930 GMT on Thursday. Bitcoin, trading around $46,250, marked a 0.6% gain on the day, retaining the week’s earlier gains in anticipation of the ETF approval.
Positive Impact of SEC Approval on Bitcoin
The SEC’s approval of Bitcoin ETFs in the U.S. is considered a landmark move that could enhance the cryptocurrency’s appeal to investors. Bitcoin has experienced nearly 9% growth in 2024, reaching $47,915 on Tuesday, its highest since March 2022. The cryptocurrency more than doubled in price in the previous year, indicating a recovery from the crypto industry’s turbulence in 2022 when major companies, including FTX, faced significant challenges. While spot Bitcoin ETFs were already available in other markets, the U.S.-listed products are expected to drive greater demand for Bitcoin.
Market Reaction and Optimism for Bitcoin’s Future
The market’s focus is now shifting to Ethereum, the second-largest cryptocurrency. BlackRock filed for a spot Ethereum ETF in November 2023. Ethereum’s price surged by as much as 4.4% on Thursday, reaching $2,638, its highest level since May 2022. Industry participants are optimistic about the potential positive outcomes for the crypto ecosystem and financial system, noting that the ETF approval opens a new chapter for Bitcoin prices. The approval allows retail and institutional investors to access Bitcoin through traditional brokerage accounts, eliminating the need for reliance on futures trading or self-custody.
Outlook for Ethereum and Market Dynamics
The industry’s attention is turning towards Ethereum, which underpins the Ethereum blockchain network. Geoff Kendrick, the head of digital asset research at Standard Chartered, noted the market’s quick shift to Ethereum, suggesting that if Bitcoin’s ETF approval is confirmed, the likelihood of an Ethereum ETF getting approval also increases. BlackRock’s filing for a spot Ethereum ETF signals a growing interest in expanding the range of cryptocurrency investment products available to investors. Ethereum’s price rise reflects the market’s expectation and anticipation surrounding the potential approval of an Ethereum ETF in the future.