The US licensing of a Bitcoin exchange-traded fund (ETF) has raised Bitcoin’s price to its highest level since December 2021. Meanwhile, Ether – the world’s second-largest digital currency also increased in price with expectations that the Ether ETF will soon be approved.
On January 10, the US Securities and Exchange Commission (SEC) approved 11 Bitcoin ETF registration applications from BlackRock, Fidelity, Invesco, VanEck, Ark Investments, 21Shares… These funds began trading on the morning of January 11. , sparking a fierce battle for market share. LSEG data shows Grayscale, BlackRock, and Fidelity are dominating trading volumes. Previously, the SEC rejected many applications to register Bitcoin ETFs because Bitcoin was fixed on unregulated exchanges, making it impossible for the agency to ensure investor safety.
According to Reuters, Bitcoin has doubled in value in 2023, gradually recovering after a volatile 2022 for the cryptocurrency industry, when many large companies like FTX collapsed. Ether increased 5% to $2,653, its highest level since May 2022.
Geoff Kendrick – People Head of digital asset research at Standard Chartered Bank said that when a Bitcoin ETF is approved, it is very likely that an Ether ETF will also be licensed. Standard Chartered estimates that Bitcoin ETFs could attract between $50 and $100 billion in 2024 alone.
Nick Ruck – Director of blockchain company ContentFi Labs said that institutions and investors now no longer have to rely on futures trading or self-custody to access Bitcoin.
In 2023, JPMorgan believes that Bitcoin ETFs in some other markets such as Canada and Europe are not attracting significant investor interest, so an ETF launch in the US will not be a factor. Changing the game for the cryptocurrency sector.
Marion Laboure – Home Strategy at Deutsche Bank said it will take time to know whether widespread adoption will impact the cryptocurrency ecosystem and financial system. ETF approval opens a new chapter for Bitcoin price but volatile conditions are still possible.
The investment community is always wary of the risks of cryptocurrencies because of previous collapses in this sector. In December 2023, Kristalina Georgieva – head of the International Monetary Fund (IMF) said that widespread acceptance of digital assets could weaken macro-financial stability.