Bitcoin rose to its highest level in more than a month on Wednesday, as traders got excited about the prospects of a spot bitcoin ETF following a series of recent applications from companies including BlackRock.
The price of bitcoin jumped 10% to $29,405.22 at about 11 a.m. ET, the highest point since May 6, according to CoinGecko data, extending gains from earlier in the day.
Investors are growing bullish about the prospects of BlackRock and other major institutional names getting involved in digital assets.
That’s despite all the bad news that’s been surrounding the crypto space of late, with the market still reeling from the scandal of FTX’s collapse and the ensuing regulatory fallout.
“The slate of spot bitcoin ETF application announcements by larger institutions has definitely brought back bullishness into the crypto markets,” Vijay Ayyar, head of international markets at CoinDCX, India’s largest crypto exchange, told CNBC.
“We also hit major support at $25K for BTC, and we’ve seen this move be driven more by pure spot buying rather than a short liquidation type move which is quite healthy,” Ayyar said.
“Market structure wise on BTC we broke a major downtrend that started in April this year and lasted around 2 months, hence most traders would be looking for us to test at least $32k. Breaking that level opens up $36k and then $45-48K.”
Earlier this week, BlackRock submitted an application for a spot bitcoin ETF, which would track bitcoin’s underlying market price. Crypto proponents say this would give investors exposure to bitcoin without them having to own the underlying asset.
Coinbase is listed as the bitcoin custodian for the proposed BlackRock ETF. BlackRock has an existing strategic partnership with Coinbase. The major U.S. crypto exchange has been undergoing a period of hardship lately, under huge regulatory pressure from the U.S. Securities and Exchange Commission.
Subsequent to BlackRock’s announcement, a litany of other asset management firms have filed their own applications for a bitcoin ETF, including WisdomTree.
Elsewhere, investors are keeping a close watch on macroeconomic indicators for a sense of movement in the crypto market.
Previously, digital coins have been tied to moves in financial markets more broadly, with bitcoin often tracking the price of U.S. equity markets. So investors have been watching data on inflation and the health of the economy for a sense of where bitcoin may end up trading next.
“Overall, crypto has also been lagging the traditional equity markets, hence this is also kind of a catchup move in a sense,” Ayyar said.