Bitcoin is up 50% so far in 2023, beating major commodities and stock indexes. Industry insiders said this year’s bank collapses have sent investors looking for alternatives to the traditional banking system, while there is also anticipation of a slowdown in interest rate rises, which is helping Bitcoin.
The world’s biggest cryptocurrency briefly topped $35,000 for the first time since May 2022, bolstered by positive sentiment about a Bitcoin exchange-traded fund that led to a spike in short liquidations.
On Tuesday Bitcoin was up by more than 10% at $34,624.82, its highest level since May 2022. Late Monday night, it rose as high as about $35,100. The surge brings Bitcoin up almost 110% from both the start of the year and its 2022 low.
Anticipation of a Bitcoin ETF has grown since crypto-focused asset manager Grayscale challenged the U.S. Securities and Exchange Commission (SEC) in court over the former’s bid to launch a Bitcoin-driven ETF.
Last week, the SEC declined to appeal that ruling by a key deadline, sparking industry hopes that Grayscale would win the case, paving the way for a Bitcoin-related ETF. This would give investors a way to gain exposure to Bitcoin’s price movements without owning the cryptocurrency directly.
What does this mean for me?
Major financial institutions, such as BlackRock, Invesco, Fidelity, and Grayscale, have been pushing for Bitcoin ETFs and submitted applications to sell such assets, portraying them as safer investment options compared to direct crypto investments known for their speculative nature and price volatility. Investors are primed to take advantage of Bitcoin ETFs, considered much safer than outright ownership.