Bitcoin price rose shortly after spot BTC ETF orders appeared on Tuesday by WisdomTree and Invesco. Bitcoin is expanding its market dominance to 50% of the total crypto market.
In the past 24 hours, the world’s largest cryptocurrency Bitcoin (BTC) has seen its price surge by an impressive 8% approaching $29,000 levels. As of press time, BTC is trading at $28,884 with a market cap of $560 billion. The latest catalyst for the BTC price rally has been a series of applications for the Bitcoin ETF over the past week.
Bitcoin ETF applications and their impact on the BTC price
On Monday, asset managers WisdomTree and Invesco filed an application for Bitcoin instant ETFs with the US SEC. These filings come within a week after financial giant BlackRock filed for a Bitcoin ETF. Another catalyst for bitcoin’s price rally was cryptocurrency exchange EDX Markets, which is backed by companies like Citadel Securities, Fidelity Digital Assets, and Charles Schwab Corp. that have announced the start of operations.
A filing on Tuesday from WisdomTree indicates that the WisdomTree Bitcoin Trust will be listed on the Cboe BZX Exchange under BTCW ticker. On the same day, $1.5 trillion asset manager Invesco also applied for a Bitcoin ETF. This is the second time the two players have filed their Bitcoin ETF application with the SEC. Back in 2021, Invesco placed an order for a futures-based Bitcoin ETF but withdrew the order at the last minute.
The Securities and Exchange Commission (SEC) has been reluctant to approve Bitcoin ETFs, including previous attempts by WisdomTree. The regulator has expressed concerns about risks such as fraud and manipulation in the bitcoin spot market. However, it does allow Bitcoin ETFs based on futures contracts. Speaking to Bloomberg, Hayden Hughes, co-founder of social trading platform Alpha Impact He said:
“The rally is supported by institutional demand. BlackRock’s announcement on the Bitcoin ETF, as well as EDX Markets, gave Bitcoin a boost in hopes that traditional institutions will add depth to the crypto market.”
SEC hurdles
As said, the SEC has rejected several applications for a Bitcoin ETF over the past few years. However, with the world’s largest financial giants throwing their weight behind this, things may be a little different this time around.
Shortly after the BlackRock filing, optimism among Bitcoin investors was renewed. Interestingly, the Grayscale Bitcoin share price also skyrocketed by a staggering 25% after the BlackRock filing. In the days since the iShares Bitcoin Trust was introduced by the world’s largest issuer of ETFs, the $16.9 billion Grayscale Bitcoin Trust (GBTC ticker) has shown an outperformance over the actual cryptocurrency. Thus, the discount on GBTC’s core bitcoin holdings has fallen to nearly 37%, compared to the 44% discount observed a week ago.
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Bhushan is a financial technology enthusiast with a good knack for understanding financial markets. His interest in economics and finance has turned his attention towards the new emerging Blockchain technology and Cryptocurrency markets. He is persistent in the learning process and keeps himself motivated by sharing the knowledge gained. In his spare time he reads fantasy and thriller novels and occasionally explores his culinary skills.
