Bitcoin and cryptocurrency prices have surged this week as expectations the U.S. regulator will green light a bitcoin futures exchange-traded fund (ETF) have soared.
The bitcoin price smashed through $60,000 per bitcoin, hitting highs of almost $63,000 yesterday before falling back slightly and pushing the combined cryptocurrency market to over $2.5 trillion—returning to its May peak.
As bitcoin, ethereum and other major cryptocurrencies rocket higher, crypto traders are predicting a “ludicrously strong” rally through the rest of 2021.
“Bitcoin, ethereum and the broader crypto market are likely to have a ludicrously strong Q4, and I predict we will see new all-time highs across the board by 2022,” Nick Spanos, the creator of the Bitcoin Center NYC and co-founder of decentralized network Zap.org, said in emailed comments.
The bitcoin and cryptocurrency market has been set alight by news this week the U.S. Securities and Exchange Commission (SEC) is finally gearing up to approve a long-awaited bitcoin futures ETF. It’s thought the introduction of bitcoin ETFs will result in more money flowing into the crypto market.
“After a week of building expectations and momentum, bitcoin has hit $60k again for the first time in almost six months,” Simon Peters, crypto-asset analyst at investment platform eToro, said in emailed comments. “[Yesterday’s] spike appears to have been triggered by investors’ growing confidence that U.S. regulators will approve the launch of an ETF based on bitcoin futures contracts—but a rise past $60,000 has been looking likely for a while now after weeks of positive net inflows into bitcoin from institutional investors, a growing migration of bitcoin from short-term holders to long-term holders, and the attendant squeeze on bitcoin supply.”
Meanwhile, others have pointed to large investors holding more bitcoin, resulting in a supply squeeze.
“There has been a steady increase in investors entering the marketplace, with the number of Kraken account sign-ups increasing consistently month-on-month since the summer,” Curtis Ting, Europe, Middle East and Africa managing director at crypto exchange Kraken, said in a statement. “This has coincided with the sustained evaporation in bitcoin’s at-the-market supply. As Kraken Intelligence highlighted in last month’s report, the amount of bitcoin held by whales reached a record total of 11.88 million—more than half bitcoin’s total supply—in mid-September. With the possibility of a bitcoin ETF galvanising the investor community, pushing more and more funds into the digital asset class, the surge above $60,000 could be the result of ever-shrinking supply struggling to match soaring demand.”
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