Bitcoin fell by 3% late Tuesday morning, dropping to $30,000 from over $35,000 following the 10% surge on Monday and 6% spike earlier in the day on Tuesday. The drop comes after BlackRock’s bitcoin ETF was removed from the Depository Trust & Clearing Corporation’s (DTCC) website, Coindesk reported. Its appearance on the DTCC website on Monday had previously sparked optimism that the ETF approval was imminent, signaling a rise in the value of the cryptocurrency in the near future.
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Bitcoin surged 6% early on Tuesday, rising to over $35,000, marking its highest spike in value in nearly 18 months. The surge comes amid growing anticipation of the U.S. Securities and Exchange Commission (SEC) potentially granting approval for a Bitcoin exchange-traded fund (ETF), which could significantly boost demand, Reuters reported.
An ETF would provide individuals a way to invest in and track the price movements of bitcoin on traditional stock exchanges, offering a more accessible and regulated investment option for the cryptocurrency market. Enabling investors to participate in bitcoin trade without directly holding or managing the cryptocurrency could introduce a new surge of capital into the industry, according to experts.
Anticipation of an EFT approval has grown over the past month, exacerbated by news that the SEC would not appeal a court ruling that found it had wrongly rejected an ETF application from the cryptocurrency firm Grayscale Investments.
The court formally returned the application to the SEC for review on Monday and, with mounting “pressure” from the count, it increases the likelihood of an ETF approval, Geoffrey Kendrick, the Head of Digital Assets Research at Standard Chartered, told Reuters.
The news sparked a 10% surge in Bitcoin on Monday, followed by a 6% spike on Tuesday, where it rose to $35,198.
Meanwhile, BlackRock, the largest provider of ETFs worldwide, applied to register a bitcoin spot ETF in June and is pending approval. In additon, BlackRock’s bitcoin ETF appeared on the clearing house Depository Trust and Clearing Corp website this week (a Nasdaq-operated financial institution that acts as a middleman in the process of buying and selling securities), further fueling anticipation it is ready to launch soon.
Still, not everyone is as optimistic about the fate of bitcoin’s ETF debut, and some experts are saying that the excitement of the stock surges may be getting ahead of itself.
“I think that these rapid rises in bitcoin are somewhat exaggerated,” Samer Hasn, market analyst at online brokerage XS.com, told CNN. “Regulatory and legislative concerns are still clouding this market, and I don’t see opportunities soon to dispel these concerns as the legal battles continue.”
At its peak, bitcoin was worth over $65,000 in November 2021, per Statista. However, the value faced a steady decline thereafter, following a series of crashes in the crypto market and its inability to hold value amid rampant inflation as many once thought.