Bitcoin breaks through 35 thousand dollars: +17% in two days
The new exchange-traded fund (ETF) that aims to bring Bitcoin to Wall Street, and which will be approved under the name “IBTC,” was an exciting new development in the long wait for SEC approval of the first passive fund linked to the current price of Bitcoin. This event triggered a significant increase in buying, bringing the price of Bitcoin to $35,000, a mark not seen since May 2022. recording a 17% increase in just two days. Il Sole 24 Ore reports it.
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Currently, institutional products already exist that allow investors to access Bitcoin via traditional markets, thus avoiding less regulated platforms and exchanges and the related risk of failure, as happened with Ftx in 2022 and the Italian exchange The Rock Trading in 2023. In Germany and Switzerland, for example, ETCs and ETNs are listed which track the trend of Bitcoin. In the United States, Bitcoin futures contracts are available at the CME in Chicago.
So why is the market paying so much attention to the approval of BlackRock’s ETF, which is one of the latest of seven issuers trying to bring Bitcoin to Wall Street along with 21 Shares/Ark Invest, Fidelity, Invesco, and others? The main reason is that this ETF would represent the first passive fund linked to the current price of Bitcoin listed on Wall Street, the most liquid and significant market in the world, and would be based on the physical collateral of Bitcoin, meaning that the issuer actually has to hold Bitcoin like warranty.
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The market sees this ETF as a lever to engage institutional investors, as well as small investors, who are currently reluctant to include Bitcoin in their portfolios, as they are skeptical about the available alternatives. This is why in the last few hours the price of Bitcoin has regained momentum. Bloomberg Intelligence ETF analyst Eric Balchunas reported that the iShares Bitcoin Trust was listed on the Depository Trust and Clearing Corp. (DTCC) under the symbol “IBTC.” However, it was clarified that the listing of the symbol does not mean that the ETF has already been approved, but usually the symbol is added before the actual launch.
The listed month of listing is October, but even if this were to change (given that we are now just a few days away from the beginning of November), the important thing is that there are increasing probabilities that the ETF is actually approved. This could bring new liquidity to a market that has been largely controlled by “hodlers,” those who hold Bitcoin long-term, and that has been influenced by monetary policy and limited supply, with up to 21 million Bitcoin .
The increase in prices in the last few hours is probably linked to speculation and the forced closure of the short positions of those who were betting on a decrease in prices, with estimated losses of approximately 387 million dollars. In addition to the hype surrounding the ETF and its possible approval by the SEC, the market will have to address the fundamental question of the nature of Bitcoin: is it digital gold or an extremely speculative asset? Although Bitcoin initially demonstrated some independence from traditional financial markets in its first 14 years, it has recently shown an increase in correlation with stock markets and liquidity provided by central banks, especially after the onset of the pandemic.
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