Bitcoin (BTC) ramped its volatility in the latter half of the week, with Wednesday’s 6.5% rally being followed by a 4.5% decline on Thursday.
Ethereum (ETH) also took a blow on Thursday by shedding nearly 5% to close the session at $1,961.
The BTC/USDT pair crept higher in today’s Asia trading window and was swapping for $36,380 at the time of writing.
Bitcoin and the wider cryptocurrency space are experiencing this bout of volatility in response to the ongoing spot bitcoin exchange-traded fund news cycle.
With asset-management titan BlackRock Inc (NYSE:NYSE:BLK) joining the quest to bring spot bitcoin products onto the mainstream stock exchange, bitcoin has responded with some serious gains.
Year to date, the world’s largest cryptocurrency is over 120% higher, far outstripping the performance of other risk assets.
Bitcoin has made considerable headway in 2023 – tradingview.com
Research conducted by Fineqia and shared with Proactive showed that worldwide exchange-traded products with digital assets as underlying collateral grew 91% in total assets under management (AUM) year to date, outpacing the growth of underlying digital assets by 30%.
Bitcoin dominates these products, making up about three quarters of these ETPs despite being roughly half of the global cryptocurrency market.
"The smoke signals are out for the very likely and a near imminent approval of Bitcoin Spot ETFs", said Fineqia chief executive Bundeep Singh Rangar. “The market’s simply responding to this positive signalling.”
However, more voices are emerging suggesting that the benefits of a spot bitcoin EFT have already been priced into the market.
In an extensive report on the bank’s 2024 outlook published this week, UBS contended that “one can recognise the significance of such but still be sceptical and not just because much of this optimism must already be baked in”.
“Our bottom line is that, to get genuinely excited, proper rails for integration with TraDfi in terms of legal and compliance, custody and prime brokerage must materialise,” UBS wrote.
According to the report: “This seems like a realistic proposition over the next year or two, though it requires monitoring closely. Only then will BTC and ETH be able to claim a legitimate place in broadly diversified professional portfolios.”
It has not just been bitcoin and ether on the move. In the past seven days, Avalanche (AVAX) has woken from its slumber and rallied more than 70%, making it the strongest performer among the top-20 altcoins.
Solana (SOL) gained 25% in the same period, with Dogecoin (DOGE) adding 17.5%.
Global cryptocurrency market capitalisation is currently $1.39 trillion, with bitcoin dominance sitting at 52.2%.
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