Bitcoin soars to near 18-month high as ETF speculation mounts

Representation of the bitcoin cryptocurrency and a price chart are seen in this illustration taken October 24, 2023. REUTERS/Dado Ruvic/Illustration Acquire Licensing Rights

Bitcoin surged 10% on Monday and an additional 5% in Asian trade. Ether and crypto-linked stocks also experienced gains. The rise in Bitcoin is believed to be driven by speculation that the approval of a bitcoin exchange-traded fund (ETF) is imminent. If approved by the U.S. Securities and Exchange Commission (SEC), the ETF would likely increase demand for bitcoin. It is expected that the introduction of a spot bitcoin ETF would provide cautious investors with stock market access to cryptocurrencies, attracting new capital to the sector.

Bitcoin, a volatile asset that has doubled in price this year, reached $34,872 on Tuesday, its highest level in almost a year and a half. During Asian trading hours, it traded above $35,000. Ether, the second-largest cryptocurrency, also saw an increase of 4.50% to $1,786.30, reaching its highest point since August. Shares of crypto-related companies, such as Coinbase Global and MicroStrategy, also experienced gains.

The anticipation of an ETF approval has been fueled by major U.S. financial firms, including BlackRock, submitting applications for bitcoin ETFs. Reports this month, including from Reuters, indicated that the SEC will not appeal a court ruling that deemed the agency’s rejection of a bitcoin ETF application from Grayscale Investments to be wrong. The court has since sent the application back to the SEC for review, increasing the chances of an ETF approval. Data from Coinglass showed significant short-covering in bitcoin derivatives in the last 24 hours.

“The SEC being pressured by the courts increases the probability” of an ETF approval, said Standard Chartered’s head of digital assets research Geoffrey Kendrick.

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