Speculation around the approval of a Bitcoin Exchange-Traded Fund (ETF) by the U.S. Securities and Exchange Commission (SEC) has triggered significant fluctuations in the cryptocurrency market, impacting Bitcoin, Ether, and other digital currencies such as FIL, AAVE, and AVAX, as well as crypto-related stocks. Despite various projections for these digital currencies - FIL's decentralized storage approach predicting a value of $5.46 by 2023, AAVE's strategic alliances forecasting a $70 value by 2023, and AVAX's high-performance blockchain solutions - their future remains uncertain due to market volatility.
The potential approval of an ETF, initially rejected for Grayscale Investments, could attract broader investor interest in cryptocurrencies. This news comes amidst a recent surge in Bitcoin's price nearing $35,000, driven by demand for spot exchange-traded funds (ETF). This bull rally has corrected a previous bearish trend that saw Bitcoin prices drop over 80%. The rally has instilled optimism among crypto enthusiasts and investors, with future market value predictions reaching up to $50,000.
A discredited SEC report on ETF approval led to a 10% spike in Bitcoin's price last week. This prompted retail traders and institutional investors to seek long positions in Bitcoin. The cryptocurrency gained traction in 2017 due to mainstream adoption that led to a surge near $20,000 but was followed by a swift decline. It then recovered to record an all-time high of $69,700 in 2021.
However, Bitcoin's journey hasn't been without turbulence. The late 2022 FTX collapse significantly impacted Bitcoin's price and destabilized the crypto market. Since then, Bitcoin has steadily risen, particularly with the buzz around ETFs.
On Sunday, Bitcoin's rally above $35,000 marked its first such rise since May 2022. This included another price spike from $31,000 to $34,000. This increase is linked to increased trading volumes and growing interest in ETF approval, such as the proposed BlackRock (NYSE:BLK) spot Bitcoin ETF, whose false approval information triggered its initial spike.
Crypto enthusiast Scott Johnson revealed on social media that BlackRock had secured a CUSIP license and would soon seed its spot ETF with cash. According to Bloomberg's Eric Balchunas, seeding an ETF only requires sufficient funding. The spot ETF volume saw a 241% gain, increasing by over $35 billion in 24 hours. The BTC price rise has also positively impacted other cryptocurrencies like Ether, Solana, and Dogecoin. Ernst & Young's Paul Brody suggests that ETF approval could lead to an influx of institutional investors.
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