Bitcoin experienced a surge in volatile trading, reaching a 2-year high of $49,000, after the Securities and Exchange Commission (SEC) granted approval for the first-ever spot bitcoin Exchange-Traded Funds (ETFs) to trade in the United States. The cryptocurrency, which initially rose above $49,000, is currently up 1% at $46,289.15, according to Coin Metrics, marking levels unseen since December 2021. Simultaneously, the price of ether also saw a 5% jump, reaching highs last witnessed in May 2022 and trading at $2,594.60.
This SEC approval is deemed a landmark victory for the cryptocurrency industry, which had pursued the launch of a bitcoin ETF for over a decade. The positive outlook began building following Grayscale’s legal success against the SEC in August, challenging the regulator’s denial of converting its Bitcoin Trust into an ETF. Bitcoin’s price has since surged by 80%.
After the SEC’s decision, bitcoin initially experienced a slight dip, as anticipated by traders. The actual impact on the demand and price of bitcoin is yet to be determined, but bitcoin ETFs are expected to play a crucial role in driving both higher. Sylvia Jablonski, CEO and chief investment officer at Defiance ETFs, stated that historical patterns suggest initial volatility, followed by longer-term price appreciation.
Ether’s rally also influenced other coins within the Ethereum ecosystem, with Polygon gaining 7%, Chainlink advancing 5%, and Uniswap rising by 6%. Analysts suggest that traders are now shifting their focus to ether in anticipation of the next narrative – an Ethereum ETF. The SEC is set to make decisions on spot Ethereum ETF applications starting in May, with BlackRock, Invesco, Ark, VanEck, and Grayscale among the firms awaiting approval.
Conor Ryder, head of research at Ethena Labs, noted the importance of staying ahead of narratives, emphasizing that bitcoin has outperformed ether in recent months due to speculation around spot ETFs. With the approval, the spotlight is turning towards ether, particularly in anticipation of a potential ETH ETF. In comparison to smaller Layer 1 blockchain networks, ether had struggled to gain momentum in 2023, showcasing a 90% increase compared to bitcoin’s 157%.
