The momentum for this price increase is probably positive news on Bitcoin spot ETFs. Data on CoinMarketCap showed that Bitcoin has surpassed the $34K threshold – the highest level of the world’s leading cryptocurrency since early May 2022, when LUNA-UST collapse occurred. At the time of writing, Bitcoin is trading around $34,115, up nearly 11% over the past 24 hours and over 21% over the past week.
The second largest cryptocurrency after Bitcoin, Ethereum, also increased nearly 6%, reaching more than $1,770, its highest price over the past 2 months.
This October, the financial market has been abuzz with rumors that a Bitcoin spot ETF will be soon approved after the SEC reportedly does not plan to appeal court decision on Grayscale bitcoin ETF. The possibility of an upcoming Bitcoin spot ETF is expected to strongly attract capital inflows into this cryptocurrency, because such a fund will give investors more opportunities to gain profits without trading Bitcoin directly.
People believe a Bitcoin spot ETF will be approved within the next three months, or even sooner, Matthew Dibb, CIO at crypto asset manager Astronaut Capital said.
Major asset managers such as BlackRock, VanEck, WisdomTree, Fidelity, Bitwise and Invesco are also applying to open a Bitcoin ETF and waiting for approval by the SEC.
In addition, the Israel-Hamas war could also be a reason for Bitcoin’s surge. Tensions between Israel and Hamas drive demand for rare assets, including gold and Bitcoin, Director Researcher at Grayscale Investments Zach Pandl commented.
Last week, Bitcoin surged nearly 10%, marking the strongest weekly increase since June. Data from Bloomberg showed that in the past 5 years, after each week of such an increase, Bitcoin will increase by an average of 10% in the next month.
The SEC has approved Bitcoin and Ether futures ETFs, but has not allowed Bitcoin spot ETF because of concerns about risks such as frauds and market manipulation. However, analysts believe that large and reputable companies applying to open a bitcoin spot ETF will be a driving force for the SEC to change its stance.
Bitcoin has risen 105% this year and is accounting for 50% of the total capitalization value of $1.25 trillion of the global crypto market. However, Bitcoin is currently still much lower than its all-time high of $69,000 in 2021.