The Surge of Bitcoin: Unraveled

Bitcoin, the world’s most famous cryptocurrency, is in the midst of a remarkable resurgence. The digital currency has shattered the $35,000 barrier for the first time since May 2022, and its value has surged by an impressive 20% in just five days. In this article, we are going to know about why bitcoin is surging again. We are also going to dive deep into the driving forces behind Bitcoin’s resurgence and what it means for investors and the financial world.

The Shift to Traditional Exchanges

A New Path for Investors

Bitcoin’s resurgence is closely tied to a fundamental change in how investors access it. There’s growing excitement about the possibility of purchasing Bitcoin funds through traditional stock exchanges, steering away from the less-regulated and occasionally questionable crypto platforms.

BlackRock’s Role

A pivotal moment in Bitcoin’s resurgence came when the BlackRock exchange-traded fund (ETF) for Bitcoin appeared on a list maintained by the Depository Trust and Clearing Corporation (DTCC), a Nasdaq-operated clearing house for stocks and ETFs.

BlackRock’s Application

Back in June, BlackRock submitted an application to register a Bitcoin spot ETF, currently awaiting approval. As the largest provider of ETFs globally, with trillions of dollars under its management, a successful launch of a BlackRock Bitcoin ETF could provide Bitcoin with newfound credibility.

Insight from Market Analyst

Samer Hasn, a market analyst at online brokerage XS.com, provides valuable insight into BlackRock’s listing in the DTCC. He notes, “This listing does not confirm that the fund has been launched or is guaranteed. However, it could be part of BlackRock’s preparations for an imminent ETF launch.”

Competition in the Arena

Other companies have also applied to launch similar Bitcoin ETFs, including Grayscale Investments.

Grayscale’s Battle with the SEC

The US Securities and Exchange Commission initially rejected Grayscale‘s ETF application. However, in August, a three-judge panel for the DC Court of Appeals overruled this decision, asserting that the regulator failed to sufficiently explain its rejection. This legal turn of events has provided a boost to cryptocurrencies throughout the summer.

Regulatory Uncertainties

Despite these developments, the cryptocurrency market is still shrouded in regulatory and legislative uncertainties. Hasn cautions, “The rapid increases in Bitcoin prices may be somewhat exaggerated, as regulatory and legislative concerns continue to create uncertainty. The legal battles are ongoing, and it might take time to address these concerns.”

Fear as a Catalyst

Seeking Stability

Another compelling factor driving Bitcoin’s resurgence is fear. In times of economic uncertainty, investors often look for ways to diversify their portfolios. Ironically, Bitcoin, often referred to as “digital gold,” has become a digital safe haven for investors seeking an alternative to traditional stocks and bonds.

Bitcoin’s Surge Amid BlackRock ETF Speculation

Recent Momentum

Bitcoin has witnessed a significant surge of nearly 15% since the beginning of the week. Speculation is rife that BlackRock’s proposed exchange-traded fund (ETF) for Bitcoin may be on the brink of regulatory approval.

Surpassing Barriers

This often-volatile cryptocurrency reached just below $35,000 on Monday night and has remained stable around $34,000 for the past two days, marking its highest price point in nearly a year and a half.

DTC C’s List Clarification

The rally in Bitcoin’s value coincides with the discovery that BlackRock’s iShares Bitcoin Trust appeared on the eligibility list controlled by the Depository Trust and Clearing Corporation (DTCC).

SEC’s Potential Approval

If the Securities and Exchange Commission (SEC) greenlights BlackRock’s Bitcoin ETF, it would be a historic moment, as it would be the first time cryptocurrency is directly tradable on traditional stock markets.

A Pioneering Leap

While the SEC has previously approved ETFs based on crypto futures, it has yet to approve any crypto-based spot ETFs, which would invest directly in cryptocurrency assets.

Positive Indications

The prospects for approving such an ETF improved significantly in late September after a federal appeals court ruled that the SEC was wrong to deny an application by Grayscale Investments to create a spot Bitcoin ETF.

A Quiet Path Forward

Reportedly, the SEC has no plans to appeal the decision and instead intends to return Grayscale’s application to regulators for reconsideration.

Frequently Asked Questions

Q What’s Behind Bitcoin’s Recent Surge?

• Bitcoin’s resurgence is influenced by a shift towards purchasing Bitcoin through traditional stock exchanges, particularly with the anticipation of BlackRock’s ETF for Bitcoin.

Q. Why Is BlackRock’s Involvement Significant?

• BlackRock, the world’s largest ETF provider, could provide Bitcoin with newfound credibility due to its trillions of dollars in assets under management.

Q. How Did Grayscale Investments Impact Bitcoin’s Surge?

• Grayscale Investments’ application for a Bitcoin ETF was initially rejected by the SEC but later overruled by a three-judge panel, boosting confidence in the cryptocurrency market.

Q. Why Does Bitcoin Thrive in Uncertain Times?

• Bitcoin, often called “digital gold,” is seen as a digital safe haven and becomes attractive to investors as a diversification option during economic uncertainties.

Q. How Do Regulatory Concerns Affect Bitcoin’s Value?

• Ongoing regulatory and legislative uncertainties create a cloud of uncertainty in the market, potentially influencing Bitcoin’s value.

Q. Why Is BlackRock’s ETF Approval Groundbreaking?

• Approval of BlackRock’s Bitcoin ETF would be historic, as it would mark the first time cryptocurrency is directly tradable on traditional stock exchanges.

Conclusion

Bitcoin’s surge is the result of a complex interplay of factors, including the shift towards traditional exchanges, particularly with BlackRock’s entry, and the perception of Bitcoin as a digital safe haven during times of economic uncertainty. While these developments are exciting, the shadow of regulatory concerns looms large. The journey of Bitcoin continues to be dynamic, and investors remain keen observers of its evolving role in the financial landscape.

Disclaimer:

Information provided on Cryptowini is for informational and educational purposes only. It does not constitute financial, investment, or legal advice. The cryptocurrency market is highly volatile. Consult professionals before making investment decisions. We do not endorse specific investments. Content may not be up-to-date. Use discretion and seek professional advice.