The value of Bitcoin has experienced a significant increase, surpassing the $28,000 mark. This surge in value can be attributed to the recent news of BlackRock and Fidelity Investments’ applications for spot BTC ETFs, which has generated enthusiasm among investors and sparked hopes of a potential Bitcoin price recovery.
The market value of Bitcoin has witnessed a rise, with the price reaching $28,765 on June 20, marking a 14-day high of $28,103. This increase in value follows the recent unfavorable news of the Securities and Exchange Commission’s (SEC) actions against Binance and oinbase">Coinbase. Despite this, optimistic traders are hopeful that Bitcoin can overcome its 10-week losing streak and continue its upward trend.
The recent surge in Bitcoin’s market value can be attributed to the increasing institutional interest in the cryptocurrency, particularly from companies such as BlackRock and Fidelity Investments. Both of these firms are reportedly in the process of filing for a spot Bitcoin exchange-traded fund (ETF), which has contributed to the positive sentiment surrounding Bitcoin’s future prospects.
Here are a few additional factors that have contributed to the current increase in Bitcoin’s market value.
The submission of an ETF filing by BlackRock has triggered a surge in Bitcoin’s market value.
The upward trend in Bitcoin’s market value began following BlackRock’s submission of an application for a spot Bitcoin exchange-traded fund (ETF) with the Securities and Exchange Commission (SEC) in the United States on June 15. Although other applicants have previously filed for a Bitcoin ETF, BlackRock is currently the largest among all applicants.
Despite several applications, including those from prominent firms such as Cathie Wood’s ARK and 21Shares, the Securities and Exchange Commission (SEC) has thus far declined to approve a spot Bitcoin exchange-traded fund (ETF). Grayscale, another company that applied for a Bitcoin ETF, was also denied approval by the SEC. Following the rejection, Grayscale appealed to the court to advocate for the legitimacy of Bitcoin futures.
BlackRock is the largest asset management company globally, with assets under management exceeding $8.5 trillion. As per the submission to the Securities and Exchange Commission (SEC), the company has indicated its intention to utilize oinbase">Coinbase for the custody of Bitcoin in the trust.
The filing for a spot Bitcoin exchange-traded fund (ETF) has also had a positive impact on the Grayscale ETF. The discount rate, which measures the difference between the market price and the net asset value of the ETF, is currently approaching its highest level since 2023 and stands at less than 37%.
Traders: A decline in the US dollar index is perceived to be beneficial for Bitcoin’s market value.
The recent decline in the US dollar index (DXY) is regarded as a favorable indication for Bitcoin’s market value. This trend has been observed historically, wherein a contraction in the DXY index has corresponded with an uptick in the sentiment for risk assets such as Bitcoin.
Following the Federal Reserve’s decision to pause interest rate hikes last week, certain market participants speculate that the US economy may expand and the dollar may continue to decline. In such a scenario, it is possible that Bitcoin’s market value could continue to surge in tandem with equity markets. As per this perspective, a favorable macroeconomic climate is expected to have a positive impact on Bitcoin’s price performance.
Although Bitcoin’s market value is currently displaying bullish momentum in the near term, driven by the recent BlackRock announcement and the decline of the dollar, the Bitcoin Fear & Greed Index has surged to a level not seen in the past three months. In contrast, certain analysts opine that Bitcoin’s price may remain range-bound for a period of at least 18 months.
