The cryptocurrency market has recently witnessed a dramatic shift from its previous bearish trend. Bitcoin’s price soared by 15% overnight, reaching a high of $35,000, while Ethereum rose by 10.7% to $1,850. Many alternative cryptocurrencies also followed this upward trend. The total market capitalization of cryptocurrencies surpassed $1.3 trillion, marking a 10.7% increase in the past 24 hours. This surge has infused the market with renewed optimism.
Below, we explore the major factors influencing this positive momentum.
BlackRock’s Strategic Moves
BlackRock, the world’s largest asset manager, has played a significant role in recent market developments.
iShares Bitcoin ETF Listed on DTCC
BlackRock’s proposed iShares Bitcoin Spot Exchange Traded Fund (ETF) has been listed on the Depository Trust & Clearing Corporation (DTCC). This is widely interpreted as a strong signal that the U.S. Securities and Exchange Commission (SEC) may be moving toward approval. Eric Balchunas, a Bloomberg ETF analyst, emphasized that being listed on the DTCC is a standard part of the process for bringing an ETF to market. The fund, with the ticker IBTC, is expected to be listed on the Nasdaq Stock Exchange.
Balchunas noted, “This is the first spot ETF to be listed on the DTCC. It’s hard not to see this as a clear sign that approval is imminent.”
Seed Capital Preparation
U.S. financial lawyer Scott Johnsson observed that BlackRock’s recent S-1 amendment filing included a CUSIP number and indicated the firm’s intention to prepare seed capital for its Bitcoin spot ETF as early as October. While this doesn’t guarantee approval, it demonstrates BlackRock’s readiness to launch. Seed capital refers to the initial funding used to purchase the underlying asset—in this case, Bitcoin—to facilitate the ETF’s operation from day one.
Grayscale’s Regulatory Progress
Grayscale Investments has also made notable strides in its efforts to offer cryptocurrency-based ETFs.
Court Ruling on ETF Conversion
A U.S. court of appeals has upheld its earlier ruling that the SEC must reconsider Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. The decision is now formally in effect, increasing pressure on the SEC to review the proposal fairly.
Ethereum ETF Application Accepted
The SEC has accepted Grayscale’s filing to convert its Grayscale Ethereum Trust into a spot Ethereum ETF. This marks another step forward in providing traditional investors with regulated exposure to Ethereum.
S-3 Filing for GBTC
Grayscale has submitted an S-3 filing—a simplified version of the S-1 form—to register new shares for GBTC, as part of its effort to convert the trust into a spot Bitcoin ETF. Grayscale believes it qualifies for the S-3 process since GBTC shares have been registered under the Securities Exchange Act of 1934 since January 2020.
Ripple’s Legal Victory Over the SEC
The SEC recently dismissed all charges against Ripple CEO Brad Garlinghouse and Executive Chairman Chris Larsen. This development is seen as a significant setback for the SEC and a win for the broader crypto industry.
Ripple’s chief legal officer, Stuart Alderoty, described the dismissal as a “surrender” by the SEC. This follows a July court ruling that stated XRP is not in itself a security.
Legal experts now estimate the SEC’s chance of successfully appealing the Ripple ruling at just 3% to 14%, reinforcing the view that the agency overreached in its case against Ripple.
The Upcoming Bitcoin Halving
The Bitcoin halving, expected in April 2024, is a major event that reduces the rate at which new Bitcoins are created. Many analysts believe this built-in scarcity mechanism has historically driven bullish cycles.
Industry Perspectives
- Changpeng Zhao (CZ), CEO of Binance, notes that hype and speculation tend to build in the months before the halving, with major price increases often materializing a year afterward.
- PlanB, a well-known analyst, argues that scarcity and the halving event—not macro factors—are the primary drivers of Bitcoin’s value.
- BitQuant, an anonymous analyst, predicts Bitcoin will reach a new all-time high before the 2024 halving, eventually climbing to $250,000.
- Caitlin Long, CEO of Custodia Bank, expects the upcoming halving to have an unprecedented impact, with Pantera Capital’s model suggesting a price of nearly $150,000 by August 2025.
- Blockware Solutions has published analysis indicating the 2024 halving could trigger a supply shock that pushes Bitcoin to as high as $400,000.
ETF Developments Fueling Optimism
The possibility of a spot Bitcoin ETF has generated considerable excitement, with many analysts predicting that approval would unlock massive institutional investment.
Expert Predictions
- Stuart Barton, CIO of Volatility Shares, expects all pending spot Bitcoin ETF applications to be approved simultaneously.
- Anthony Scaramucci, founder of SkyBridge Capital, suggests Bitcoin’s valuation could multiply 11-fold if BlackRock’s ETF is approved.
- Paul Brody, EY’s Global Blockchain Leader, believes there is pent-up institutional demand worth trillions of dollars waiting to enter the market once a spot ETF is greenlit.
Broader Market Sentiment
Several influential voices in finance have expressed strong confidence in Bitcoin’s long-term prospects.
Institutional Recognition
- ByteTree upgraded its Bitcoin market signal from neutral to bullish, noting that Bitcoin has served as a safe haven during recent turmoil in traditional equity and bond markets.
- Gabor Gurbacs, Digital Assets Strategist at VanEck, envisions Bitcoin evolving from a store of value to a foundational asset in global capital markets.
- Tim Draper, a prominent venture capitalist, remains confident that Bitcoin will reach $250,000, potentially by 2024 or 2025.
- Standard Chartered has projected that Bitcoin could hit $50,000 by the end of this year and $120,000 by the end of 2024.
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Frequently Asked Questions
What caused Bitcoin to surge 15% in one day?
The sudden price increase was driven by a combination of factors, including progress toward a spot Bitcoin ETF, positive legal developments for Ripple, and growing anticipation around the 2024 Bitcoin halving.
How does the Bitcoin halving influence its price?
The halving reduces the rate at which new Bitcoin is created, decreasing the available supply. If demand remains strong or increases, this scarcity has historically led to significant price appreciation.
What is the significance of a spot Bitcoin ETF?
A spot Bitcoin ETF would allow traditional investors to gain exposure to Bitcoin without directly holding it, making it easier for institutions and individuals to invest. This could significantly increase demand and liquidity.
Will Ethereum also benefit from these market conditions?
Yes, Ethereum often correlates with Bitcoin during bullish market phases. The acceptance of Grayscale’s Ethereum ETF application is also a positive signal for Ethereum’s future.
Is now a good time to invest in Bitcoin?
Market timing is always uncertain. While many analysts are optimistic, it’s important to conduct personal research, consider your risk tolerance, and think long-term rather than seeking short-term gains.
How can I stay updated on cryptocurrency market trends?
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