Cryptocurrency prices soared today, led by Bitcoin, which jumped to $35,000 for the first time in 17 months, amid optimism that licensing cryptocurrency exchange-traded funds will give it momentum.
BlackRock and Fidelity Investments are among the asset managers racing to obtain a license for a U.S. exchange-traded bitcoin spot fund. Some believe that these funds will be able to attract new financial flows to the most famous cryptocurrency.
For the sixth day in a row, the largest cryptocurrency by market capitalization continued to rise, and today it jumped by 17% to $35,157, regaining a level not seen since May 2022. Smaller currencies gained momentum; The price of Ethereum increased by 12% to reach $1849, at 05:26 Riyadh time.
Cryptocurrency mining companies are rebounding
Shares of cryptocurrency mining companies also received a strong boost in evening trading after the market closed in New York yesterday, Monday. Marathon Digital consolidated its gains with an increase of more than 9%, and Riot followed with a similar jump. Which means that the gains of the two companies' shares in two days may reach 21% for the first and 18% for the second when the market opens in the United States on Tuesday.
MicroStrategy bet on Bitcoin
Bitcoin's performance represents a boon for MicroStrategy, an American company based in Virginia. The company has boosted its investments in cryptocurrency since 2020, spending $4.53 billion. The company's holdings amounted to 158,800 units of Bitcoin as of the end of last July. At an average price of $29,672, according to the company’s disclosure last August.
The year 2022 was difficult for the company, as its stock declined by 74%, following the example of the cryptocurrency’s 64% decline to $16,500. But MicroStrategy shares began a recovery path this year, rising 160%, with the price of Bitcoin rising by about 85%.
Bitcoin reached an all-time high of $69,000 in November 2021.
Waiting for approval to license Bitcoin funds
The US Securities and Exchange Commission has so far resisted Bitcoin exchange-traded funds due to risks such as fraud and manipulation of the underlying market. The requests submitted by giant investment companies raised speculation that the US agency would retreat (from its position).
The regulator also recently indicated that it would not appeal a court ruling that could pave the way for the $18.4 billion Grayscale Bitcoin Trust to convert to an ETF.
The European Central Bank is moving closer to issuing a digital euro
According to Bloomberg Intelligence analysts Elliott Stein and James Seyphart, approval of a Bitcoin exchange-traded fund seems inevitable, and it is likely that a group of funds will be given the green light, although the exact timing remains uncertain.
The authority has already permitted ETFs that hold Bitcoin and Ethereum futures contracts. The authority generally took strict action against cryptocurrencies after market and corporate collapses last year, such as the bankruptcy of the FTX exchange amid fraud allegations.
