Bitcoin: rises to $49,000 after SEC decision

Today bitcoin soared to its highest level in more than two years after the US Securities and Exchange Commission, as expected, gave the green light to the first spot Bitcoin ETFs to be traded in the US.

Largest cryptocurrency rose more than 5%, momentarily breaking through the $49,000 mark. Meanwhile, the price of Ether rose 8% to 2,678.74, its highest level since May 2022.

The ETF’s approval is a landmark moment for the crypto industry, which began trying to launch a Bitcoin ETF more than 10 years ago.

After the SEC decision, Bitcoin initially fell, as many traders expected. While the amount of inflows into the new funds when they begin trading remains to be seen, Bitcoin ETFs are widely expected to increase demand – and ultimately the price – for Bitcoin.

Mining stocks, which benefit from rising Bitcoin prices and tend to reflect long-term investment sentiment toward Bitcoin, have received significant momentum. Wall Street favorites Iris Energy and CleanSpark rose 6% and 8%, respectively.

The top U.S. securities regulator approved the 11 ETFs on the list, with traders ranging from established players such as Fidelity and Invesco to digital-focused newcomers including Grayscale and Ark Invest.

The first funds, which trade on exchanges (like stocks) and benefit from special tax treatment in the United States, are expected to begin trading on the morning of Thursday, January 11 (US time), when BlackRock rings the opening bell on the Nasdaq to launch the iShares Bitcoin Fund Trust.

Race for… pie
The regulation is expected to kick off a fierce battle for market share among issuers that have already slashed fees on products that fall well below U.S. ETF industry standards. Bernstein analysts estimate Bitcoin ETF flows will gradually increase to more than $10 billion in 2024 and reach $80 billion by the end of next year.

“Bitcoin ETFs are expected to become a hotly competitive asset accumulation game, with 11 leading asset managers launching them together,” the broker said in a note. Since all ETFs that track the price of an asset are designed to provide investors with the same return, fees tend to dictate market share.”

Many ETF issuers, including Bitwise and VanEck, have already begun promoting their products by advertising Bitcoin as an investment.

In anticipation of the US Securities and Exchange Commission’s decision, Bitcoin, the largest and most famous cryptocurrency in the world, has risen in price by more than 150% by 2023. According to CoinGecko, on January 10, Bitcoin’s market capitalization was more than $900 billion.

“This (approval) could lead to a significant influx of funds from institutions interested in entering the cryptocurrency market,” Moody’s Bumrah said.

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