Bitcoin reaches a 21-month high following the approval of ETFs by US regulators.

NEWS

Gilard Cob

1/11/20242 min read

gold and black round coin
gold and black round coin

Bitcoin remained stable on Thursday, maintaining its highest level since March 2022. This comes after U.S. regulators granted approval for the first U.S.-listed exchange traded funds (ETFs) to track the cryptocurrency. This significant development has the potential to increase its attractiveness to investors.

On Wednesday, the Securities and Exchange Commission (SEC) announced its approval of 11 applications. These include applications from BlackRock (BLK.N), Ark Investments/21Shares (ABTC.S), Fidelity, Invesco (IVZ.N), and VanEck.

By 0930 GMT on Thursday, three ETFs, including BlackRock's (IBIT.O), were already trading, and there were expectations for more to start later in the day.

Bitcoin is currently trading at approximately $46,250, showing a 0.6% increase for the day. It has managed to maintain the gains it achieved earlier this week, as investors eagerly await approval.

The world's largest cryptocurrency has experienced a significant increase of almost 9% since the beginning of the year, reaching a peak of $47,915 on Tuesday, which is the highest it has been since March 2022.

Last year, the price more than doubled, marking a recovery after a turbulent 2022 for the crypto industry. During that time, several major companies, including trading venue FTX, experienced significant collapses.

"A spot Bitcoin ETF offers standardized access to the digital asset as an investment, while preserving Bitcoin's core proposition," stated Marion Laboure, senior strategist at Deutsche Bank Research.

"The future will reveal whether increased adoption will result in more significant changes for the crypto ecosystem and financial system." Currently, the approval of the ETF marks a new phase for bitcoin prices, although it is expected that there will continue to be fluctuations in the market.

Bitcoin ETFs have been available in other markets such as Canada and Europe, but they have not been able to generate significant investor interest.

Industry participants, however, expressed optimism that the introduction of new U.S.-listed products would lead to increased demand for bitcoin.

According to Nick Ruck, COO of ContentFi Labs, a blockchain firm specializing in IP licensing, retail and institutional investors now have the option to gain exposure to Bitcoin without relying on futures trading or self custody. They can simply use a traditional brokerage account.

According to him, if the ETFs require additional Bitcoin to fulfill the demand, they will have to purchase it from the market since the supply of Bitcoin is fixed.

Attention is now shifting towards ether, the second largest cryptocurrency that supports the ethereum blockchain network.

In November 2023, BlackRock submitted an application for an ethereum ETF.

On Thursday, the price of Ether surged by 4.4% to reach $2,638, marking its highest level since May 2022.

"After receiving confirmation of yesterday's highly-anticipated bitcoin announcement, the market is now shifting its focus to ETH. Analysts believe that if bitcoin's announcement is complete, it is highly probable that the ETH announcement will follow suit," stated Geoff Kendrick, head of digital asset research at Standard Chartered.

Reported from London by Elizabeth Howcroft, Singapore by Rae Wee, and Shanghai by Jason Xue. Written by Alun John. Edited by Jacqueline Wong and Jane Merriman.