The cryptocurrency market has been buoyed by optimism as the U.S. Securities and Exchange Commission (SEC) began its decision-making window for spot Bitcoin exchange-traded funds (ETFs). This anticipation comes on the heels of applications from financial giants such as Invesco and BlackRock (NYSE:BLK), and a recent court ruling favoring Grayscale against the SEC.
Bitcoin experienced a significant price increase to $38,000, reflecting market expectations for an ETF approval, before stabilizing at around $36,500. Over the past month, Bitcoin has seen a notable 33% rise in value. Despite a potential delay in approvals until 2024 if not decided within the current window, analysts from Bloomberg estimate a 90% chance of approval before January 10, 2024.
On Thursday, Bitcoin was trading up by 4.6% for the week at $36,495, while Ether saw a weekly gain of 7.5%, reaching $2,058. The positive trend was further supported by Glassnode analysts who observed tight Bitcoin supply due to high coin inactivity metrics, suggesting a bullish sentiment among investors. Reflexivity Research highlighted that 70% of Bitcoin's supply has not been touched for over three months. Despite a 45% drop from its peak in November 2021, Bitcoin has rallied over 120% this year without triggering a sell-off among most holders.
In tandem with these developments, BlackRock registered an iShares Ethereum Trust with Delaware's Division of Corporations, signaling progress towards an Ether ETF. Anchorage Digital commented that Ethereum's proof-of-stake model could enhance institutional adoption and offer additional staking rewards if an ETF is approved.
Smaller cryptocurrencies also saw growth, with Hashnote analysts suggesting that the market might be entering a 'crypto spring'. The broader crypto market's uptick indicates increased investor confidence and a possible shift in sentiment towards digital assets.
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