Robust network growth and the steadily increasing likelihood of approval of the first spot-based Bitcoin ETF in the US led the Bitcoin price to a new high for the year in the USD 35,000 range. At +10.22%, Bitcoin achieved the biggest daily increase since February 2022.
A week ago, a false report caused turbulence in the crypto markets. The U.S. Securities and Exchange Commission (SEC) had approved the BlackRock iShares Bitcoin ETF. While the headline turned out to be false, the reaction of the Bitcoin price proved pent-up interest in the digital asset. Finally, there is a grain of truth behind most rumors. New adjustments to ETF filings now reignited hopes for a Bitcoin fund, leading to a daily double-digit percentage price increase. The rally is supported by fundamental growth in the sector.
Subscribe to our newsletter
The best articles of the week, directly delivered into your mailbox.
Bitcoin ETF secured until the end of the year?
In mid-June, BlackRock surprised the financial industry by filing its own bitcoin ETF application. Previously, several issuers tried their hand at a spot-based product but were unable to secure SEC approval. As an established financial titan with 8.5 trillion. USD in assets under management, an applicant of a higher caliber entered the race. Over a dozen other fund providers also filed applications in response. The bitcoin price reacted positively accordingly, but began another period of consolidation in the months that followed.
A court victory by crypto conglomerate Grayscale against the SEC in late August then dramatically increased the likelihood of ETF approval. A U.S. court ruled that the agency's categorical rejection of a spot fund was arbitrary and unlawful. Since then, BlackRock & Co. filed various adjustments to their applications at the SEC's request. This confirmed the suspicion that the Securities and Exchange Commission is taking a serious look at the funds. Bitcoin ETF approval by the final deadline of January 10, 2024 can therefore be classified as highly likely.
Fundamental readings at all-time highs
With significant bitcoin price movements, it's easy to lose sight of the big picture. While ETF hopes gave the markets a short-term boost, the rally so far has been supported by sustained fundamental growth. That's because rising bitcoin demand is reflected in a variety of metrics.
For example, the number of new addresses created in recent weeks cracked the old all-time high of over 760,000 per day. Similar values were only reached during the market peaks in 2017 and 2021. The total computing power of the Bitcoin network - measured as "hashrate" - is also in a rapid upward movement. New miners are thus entering the market in droves despite lower profitability. Both the demand and supply sides of the Bitcoin blockchain space are more competitive than ever.
