After the SEC approved the first spot Bitcoin ETFs seven weeks ago, crypto prices are rising to levels not seen since late 2021. BlackRock received a record $612 million into its industry-leading Bitcoin ETF on Thursday and crossed $10 billion in assets under management, a day after trading activity reached $7.7 billion. As investor fever continues, volumes topped $4.7 billion yesterday.
Bitcoin hit $63,000 on Wednesday, and the ETFs are fueling demand not seen since the last bull run, when Bitcoin reached nearly $70,000 in November 2021.
Since 2013, when the Winklevoss twins failed to get SEC clearance, the U.S. crypto industry has pushed for Bitcoin ETF, which lets investors trade bitcoin shares on major exchanges.
Even though it approved a Bitcoin futures ETF in 2021, the regulatory agency rejected numerous proposals from top companies for over a decade, citing immature crypto markets and manipulation. But everything changed in 2022 when digital asset provider Grayscale sued the SEC, calling the spot version rejection "arbitrary and capricious". After winning the litigation in August 2023, Grayscale converted its long-standing Bitcoin trust into an ETF, allowing Fidelity and BlackRock to enter the market.
Bitcoin rebounded in December after the November 2022 FTX meltdown, breaking $40,000 in expectation of acceptance. After the SEC statement in early January, Grayscale shareholders left the newly converted Bitcoin ETF, lowering prices. Bitcoin fell below $40,000 in late January before recovering as Grayscale withdrawals halted and money poured into alternative choices.
Bitcoin broke $60,000 on Wednesday, and ETFs are driving the uptrend with unprecedented inflows. When flows dropped on Thursday, Bloomberg analyst James Seyffart said on X that $4.7 billion would have been a record if not for the previous day's $7.7 billion.
Traditional brokers like Morgan Stanley are considering introducing spot Bitcoin ETFs to their platforms, another optimistic sign. Even if Bitcoin's rise boosts Ether and Dogecoin values, tailwinds may emerge. Greyscale's Bitcoin ETF, which costs more than others, had $600 million in outflows on Thursday.
On Wednesday, JPMorgan analysts warned that the halving, which will lower Bitcoin miners' rewards, might raise Bitcoin's production cost and reduce the number of miners. The halving occurrence might lower Bitcoin's price to $42,000, economists say.
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