Over the past day, the price of Bitcoin surged by about 11%, rising above the $35,000 mark. This is a local high for the first cryptocurrency since May 2022.
According to CoinGecko, Bitcoin rose above $35,000 on October 24, a record high for the first cryptocurrency over the past year and a half. The last time BTC quotes went above $35,000 was in May 2022. Then the price didn’t rise above $30,000. As of 12:00 (GMT+3), the first cryptocurrency is trading around $34,200.
Analysts believe the main driver of price growth is the anticipation of approval of a spot Bitcoin ETF in the United States. Lucy Hu, Senior Trader at Metalpha, said that the rapid growth of BTC price during the last week is a direct result of traders’ heightened expectations. The news spreading on social media that iShares Bitcoin Trust (IBTC), an exchange-traded investment fund from BlackRock, has been added to the list of assets backed by Depository Trust & Clearing Corporation (DTCC) also fueled the growth.
Michaël van de Poppe, Founder of MN Trading, believes that the actions of investment giants signal that we should expect the approval of the financial instrument from day to day. According to JPMorgan analysts, the U.S. Securities and Exchange Commission (SEC) will approve several applications for spot Bitcoin ETFs within a few months, as the regulator hasn’t filed an appeal against the court ruling in the case against Grayscale Investments.
The SEC has recently postponed the deadline for reviewing several applications for issuing a spot Bitcoin ETF, sparking outrage from U.S. officials who demanded the regulator to immediately approve the listing of the investment instruments.
Paul Brody, Global Blockchain Leader at accounting firm Ernst & Young, told CNBC that institutional investors are willing to pour trillions of dollars into investment instruments based on Bitcoin. However, this will happen only after the SEC approves crypto products. His statement is supported by data from the weekly report by CoinShares, according to which the inflow of funds into Bitcoin-based crypto funds amounted to approximately $55.3 million between October 13 and October 20. Notably, BTC-based investment products attracted 84% of the total amount of capital allocated to crypto products last week.
But the surge in Bitcoin negatively affected traders who had to close short positions in BTC worth over $178 million. In the last 24 hours, the total liquidations in the crypto market amounted to approximately $400 million, CoinGlass data shows.
The growing value of the first cryptocurrency has traditionally provoked an increase in the quotes of altcoins:
- ETH rose by 8% over the last 24 hours and reached $1,844;
- ADA and DOGI grew by about 6% over the day, reaching $0.28 and $0.07, respectively;
- SOL went up to $32.7, growing by almost 5% over the day.
However, the short-term growth of quotations may turn into a sharp decline after the speech of U.S. Fed Chair Jerome Powell, scheduled for October 25. The official’s speech usually strongly influences the financial market, and expecting good news about the U.S. monetary policy isn’t worth it.
Earlier, the crypto market showed growth in response to Powell’s statement about raising the interest rate and preserving the stability of the banking system. And the Fed Chair’s statement that the inflation rate increased again provoked a massive sell-off in the crypto market.
