BTCUSD and several other digital coins experienced slight declines on Thursday, yet the crypto asset market managed to retain relatively high price levels. This resilience can be attributed to the persistent hope that regulatory authorities will soon give their nod to a spot Bitcoin exchange-traded fund (ETF), a long-awaited catalyst for the crypto reality.
The cost of Bitcoin, the pioneer of digital coins, has seen a 1% dip over the past 24 hours, resting at $28,250. However, it has held these elevated levels, maintaining a trajectory that started with a rally last Friday. This renewed optimism stems from the belief that the launch of the first spot Bitcoin ETF is inevitable, which could probably bring a fresh surge of interest from both retail and institutional investors, marking a significant step towards broader cryptocurrency adoption.
An analyst at broker Oanda, Edward Moya, commented, “Bitcoin is hovering near the upper boundaries of its recent range as optimism grows that a spot Bitcoin ETF approval will happen before the end of the year.”
Market participants are closely watching the possibility that the Grayscale Bitcoin Trust (GBTC) may be permitted to convert into an ETF. Additionally, the prospect of the Securities and Exchange Commission (SEC) giving the green light to spot Bitcoin ETFs offered by traditional financial giants like BlackRock is generating significant excitement in the crypto space.
As investors eagerly await the approval of these ETFs, the crypto market stays relatively resilient, even as traditional markets face macroeconomic headwinds. This week has witnessed stock market declines, with both the Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX) experiencing negative trends. In contrast, Bitcoin has held its ground. This resilience demonstrates that the spotlight on crypto-native catalysts has helped the cryptocurrency weather external market turbulence.
Intriguingly, Bitcoin surged above $30,000 on Monday, triggered by a false report claiming that the first spot Bitcoin ETF had received approval. This incident highlights the potential for increased volatility in the cryptocurrency market, which has experienced stagnation over the past few months.
Alex Thorn, head of research at Galaxy Digital, remarked, “Had the headline been real, it’s likely Bitcoin would have tested $35,000 by the end of the day Monday. A real announcement would have likely drawn more sustained follow-through… that Bitcoin is sustaining now at higher levels than last week shows some repositioning and re-pricing of the ETF likelihood.”
Beyond Bitcoin, Ether (ETH USD), the second-largest cryptocurrency, faced a 2% drop, bringing its price down to $1,550. Smaller tokens, often referred to as altcoins, also experienced declines, with Cardano and Polygon dropping 2% each. Memecoins, including Dogecoin and Shiba Inu, followed the same pattern with a 2% decrease.
To sum up, while Bitcoin and the broader digital coins market have witnessed minor price declines, the optimism surrounding the possible authorisation of a Bitcoin Spot ETF persists to bolster the market. This anticipation serves as a testament to the growing mainstream interest in digital coins and their evolving function in the multinational financial landscape.