Bitcoin continues to progress and dominates the rest of cryptocurrencies

Last week, the price of Bitcoin started to rise again. The queen of cryptocurrencies, still marked by a particularly traumatic year 2022, crossed the $30,000 mark before briefly exceeding another key threshold, that of 35,000 dollars. This is the first time in over a year that Bitcoin has reached this amount. Since the start of the year, the price of king Bitcoin has even doubled.

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A first Bitcoin ETF imminent?

Behind this flight, we find a new indication of the approval of first ETF (Exchange-Traded Fund), an exchange-traded investment fund dedicated to Bitcoin in the United States. Filed by BlackRock, this index fund should allow American investors to gain exposure to BTC without having to hold it in a portfolio on the blockchain.

The iShares Bitcoin Trust, BlackRock’s ETF project, has indeed appeared on the site of the Depository Trust & Clearing Corporation (DTCC) with the symbol IBTC. It is an organization that provides clearing, custody and risk management for various financial instruments, working as a true gatekeeper for financial transactions. According to Eric Balchunassenior ETF analyst at Bloomberg, he is “hard not to take this as a signal that approval is certain/imminent”.

At the same time, an appeals court ordered the SEC (Securities and Exchange Commission) to better justify its refusal to approve the ETF of Grayscale, an American digital asset management company. Grayscale has indeed filed an application to transform the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. So far, the SEC has denied the request. For the court of appeal in charge of the case, the SEC showed itself “arbitrary and capricious” by opposing the project. The SEC has indicated that it does not not appeal the decision of the court, which gives investors hope that the ETF will be approved quickly.

“Now that the SEC has chosen not to appeal and has even actively responded by making changes/comments to the ETF applications, the likelihood of approval by the January 10 deadline appears very high”reports Bernstein Research, the research division of the financial group Sanford C. Bernstein & Co. LLC.

As a reminder, the market waits feverishly the approval of the first ETF. For many observers, the arrival of an ETF, followed by a wave of other index funds linked to Bitcoin, should propel the price of the cryptocurrency beyond $150,000. This is why the slightest information regarding the arrival of BlackRock’s financial instrument triggers an explosion in the price. In a press release sent to 01Net, James Koutoulas, the founder of the trading firm Typhon Capital, believes “a BTC spot ETF approval is imminent and could spark another bull cycle in crypto”. This is the theory of most speculators.

“Investors logically tried to enter before the actual announcement, which seems increasingly likely”theorizes CoinShares head of research James Butterfill to The Block.

Bitcoin as a “hedge”

Other analysts also point the finger at macroeconomic factors. For Lucy Hu, financial expert at Metalpha, a wealth management company, the rise in Bitcoin was also caused by “the continued escalation of the conflict in the Middle East”. As the situation flares up in the Gaza Strip, “institutional investors”which have a considerable impact on the market, “allocate bitcoins to their portfolios for risk diversification”, estimates the analyst, interviewed by The Block. Jack Tan, co-founder of the trading company WOO Network, agrees and ensures that Bitcoin is perceived “as a hedge against geopolitical turbulence”.

This time, Bitcoin’s rise remained stable. The digital currency did not start to decline again after a few days. One week after the increase, “Bitcoin’s momentum continued”, notes Simon Peters, market analyst at eToro, in his weekly report. According to the expert, Bitcoin is on an upward trajectory, supported by “enthusiasm over ETF news”.

King Bitcoin dominates

As always, Bitcoin has lifted the entire cryptocurrency industry. Most digital currencies have increased in value in the wake of King Bitcoin. But, in this context of gradual recovery, Bitcoin has taken over altcoins.

The dominance of BTC, that is to say the market share of Bitcoin compared to all cryptocurrencies, has reached the 53%, can be seen on TradingView. The capitalization of Bitcoin is $670 billion, compared to more than $1,200 billion for the entire crypto market. This is the first time since April 2021 that Bitcoin dominance has reached this level. This surge in dominance can be explained, again, by the enthusiasm generated by ETFs dedicated to Bitcoin.