Bitcoin Price Rallying Over $34 000 – Find Out Why!

Bitcoin seems to be waking from its stable period with upside price action. The strong resistance line of $30K has been broken several times during the last few weeks, resulting in the highest price since May 2022. There are two main factors contributing to this sudden price increase - the psychological effect of the upcoming Bitcoin halving and increasing expectations for BTC spot ETF approval by the SEC.

Together we will review the most interesting news stories regarding the impending BTC ETF. We will also look at its evolution over time and talk about why exactly is BTC ETF such a big deal for the crypto market.

The Latest Buzz

The narrative around a BTC ETF has been one filled with speculation, and a dash of drama. Just recently, on October 16, 2023, a false headline swept across the news landscape, claiming a spot BTC ETF application by BlackRock had received the green light from the SEC. This erroneous news triggered a brief but notable 7% surge in Bitcoin's price to $30,000, offering a glimpse into the kind of market reaction a real approval could incite.

Another catalyst for Bitcoin's price turned out to be the newly finished court case between Grayscale (a major digital assets manager) and the SEC. The court ruled in favor of Grayscale, effectively forcing the SEC to reconsider the application to turn the famous GBTC Trust into a spot ETF.

All the speculation and expectation in the air further increases the positive sentiment on the BTC price. Analysts from JPMorgan indicate that the full approval of BTC spot ETF is likely to happen before 10. January 2024, concerning multiple ETFs rather than just one.

BTC ETF First Application 10th Anniversary

Although a proper spot BTC ETF is still to be approved, the concept of BTC ETF as a public investment tool is actually more than 10 years old. The first mention of such a structure comes from the Winklevoss twins, Cameron and Tyler, co-founders of the Gemini exchange.

The summer of 2013 saw the submission of the initial proposal, igniting discussions and hopes within the financial and crypto communities alike. Over the years, numerous proposals from various entities followed suit, each applying for the U.S. Securities and Exchange Commission (SEC) approval. 

The timeline saw a mix of anticipation and setbacks. Noteworthy milestones include the ProShares Bitcoin Strategy ETF approval in October 2021, which, while being a futures-based ETF, broke new ground by becoming the first Bitcoin-linked ETF to trade in the US. However, the quest for a spot Bitcoin ETF approval, which would track Bitcoin's price directly, continues even as we tread into late 2023, with the market attentively eyeing every move from regulatory authorities.

Regulatory Difficulties

The journey towards a Bitcoin ETF approval is accompanied by regulatory hurdles, primarily facilitated by the SEC. The SEC's primary concerns revolve around market manipulation, liquidity, and investor protection in the relatively nascent and volatile cryptocurrency market. 

Past Bitcoin ETF proposals have faced denials due to these concerns, with the SEC seeking to ensure a robust regulatory framework to safeguard investors' interests.

The resistance towards approval could also stem from the inherent characteristics of Bitcoin and other cryptocurrencies, which are decentralized and operate in a largely unregulated market. This poses a challenge in meeting the conventional regulatory standards set for traditional financial instruments.

Moreover, the SEC has shown a cautious approach, specifically towards spot Bitcoin ETFs. Spot ETFs hold the actual asset, as opposed to futures-based ETFs, which are considered to have a level of insulation from potential market manipulation. The approval of a spot Bitcoin ETF would show a significant regulatory leap, marking a more profound acknowledgment of Bitcoin as a legitimate and stable financial asset.

Why The Fuss About BTC ETF?

The buzz around a BTC ETF isn't mere hype. It represents a significant milestone towards bridging the conventional financial markets with the emerging crypto economy. A BTC ETF approval would showcase a nod of legitimacy from regulatory bodies, potentially opening the doors for institutional and retail investors alike. 

Being listed on traditional exchanges, the spot Bitcoin ETF would offer a simple and more regulated avenue for investors to gain exposure to Bitcoin without the hassles of managing private keys or understanding the technicalities of blockchain technology. 

This ease of access coupled with a stamp of approval could catalyze a new era of capital inflow into the crypto market, elevating Bitcoin and other cryptocurrencies closer to mainstream acceptance and maturation.

The Bottom Line

The quest for Bitcoin ETF approval, particularly for a spot ETF, symbolizes the growing acceptance of cryptocurrencies in the traditional financial landscape. This decade-long journey, filled with proposals and regulatory hurdles, highlights the enduring ambition to bridge conventional financial markets with the emerging crypto economy.

As the anticipation for a spot Bitcoin ETF approval persists, the evolving regulatory landscape brings us closer to a more inclusive financial framework. The unfolding narrative of Bitcoin ETFs not only showcases the resilience and innovation within the cryptocurrency sphere but also hints at a future where traditional and digital assets coexist, opening new avenues for investment and financial diversification.