Bitcoin Approaches $38,000 Fuelled by ETF Expectations
Bitcoin is surging towards $38,000, a level last seen in May 2022, as the ongoing rally gains momentum. This surge in value is primarily driven by expectations of increased demand for Bitcoin from exchange-traded funds (ETFs).
Adding to the excitement, ether, the second-largest cryptocurrency, also experienced a jump in value. This came after BlackRock filed with the Securities and Exchange Commission (SEC) for an ETF that will hold ether.
While the first US ETF directly investing in Bitcoin is still awaiting approval from the SEC, Bloomberg Intelligence expects a batch of such funds to get approved by mid-January. This imminent approval could make it easier for institutions and individual investors to gain exposure to Bitcoin.
The belief that the Federal Reserve has finished raising interest rates is another factor boosting crypto prices. This positive sentiment has led to a recovery in crypto valuations. The upward trend may continue if real interest rates reach their peak and progress is made on spot ETF approvals in the US market, according to Zach Pandl, Managing Director of research at Grayscale Investments LLC.
There is speculation among experts about whether the current climb in Bitcoin already factors in the potential impact of spot ETFs. However, conversations surrounding Bitcoin investment are driven by the diversification benefits it offers. Over longer periods, Bitcoin is not significantly correlated with traditional assets like stocks, making it an appealing investment option.
Investors and experts continue to anticipate potential inflows from ETFs, despite the delays in approval. The market remains hopeful for the green light from the SEC, as it would mark a significant milestone in the mainstream adoption of Bitcoin.
With Bitcoin inching closer to $38,000 and the prospect of ETF approvals on the horizon, the crypto market is buzzing with excitement and potential opportunities for investors.
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