- June 19, 2023
- Posted by: [email protected]
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Bitcoin experienced a second surge within a span of 24 hours following the announcement by investment management giant BlackRock that it had filed paperwork for a spot bitcoin exchange-traded fund (ETF). As a result, Bitcoin surpassed the $26,000 mark and soared to its highest level in a week.
According to CoinDesk data, the leading cryptocurrency by market capitalization was recently trading at $26,369, reflecting a nearly 5% increase over the past 24 hours. Just a day earlier, Bitcoin was trading below $25,000, nearing its three-month low. However, after the news of BlackRock’s filing emerged, it settled at around $25,500.
Ethereum, the second-largest cryptocurrency, also saw a positive response, trading at $1,721, marking a 4.5% increase from the previous day. Earlier in the week, ETH had dipped below the $1,700 threshold for the first time since mid-March.
Other major cryptocurrencies, including those that experienced a decline following their mention in recent U.S. Securities and Exchange Commission (SEC) lawsuits against Binance and Coinbase, made significant recoveries. SOL, the native token of the Solana blockchain, rose by over 7%, while ADA (Cardano), MATIC (Polygon), and ALGO (Algorand) experienced gains of 3.5%, 3%, and 4.1%, respectively.
Although the CoinDesk Market Index, which measures overall cryptocurrency market performance, increased by 4.4%, CoinDesk’s Bitcoin and Ether Trend Indicators remained in a downtrend, reflecting ongoing investor concerns regarding the industry’s exposure to increased U.S. regulatory scrutiny, inflation, and monetary policy uncertainties.
In the equity market, the main indexes were trading sideways after experiencing fluctuations earlier in the day. The tech-focused Nasdaq Composite showed a slight increase, while the S&P 500, which heavily features technology companies, saw a marginal decrease. Stocks had been on a six-day surge, with the Nasdaq, S&P 500, and Dow Jones Industrial Average (DJIA) all recently reaching 2023 highs. Gold and U.S. Treasury yields also saw slight gains.
In a speech, Federal Reserve Governor Christopher Waller addressed concerns about inflation, stating that the central bank will continue to monitor the situation. Despite facing criticism for its hawkish posture, which contributed to a financial sector crisis in March, the Fed recently paused its 14-month cycle of interest rate hikes, which had frequently put downward pressure on cryptocurrency and other asset markets.
Mark Connors, head of research at Canadian crypto asset manager 3iQ, suggested that BlackRock’s timing in filing for a spot bitcoin ETF may indicate “implicit support” as it confronts legal actions from the SEC. The proposed iShares Bitcoin Trust by BlackRock will have Coinbase as the custodian for the bitcoin held in the trust.
Connors added that the timing of BlackRock’s filing aims to separate itself from the SEC’s actions against Binance and Coinbase and reiterate its commitment to Coinbase and a regulated spot bitcoin trust. This move is seen as positive for Coinbase and the broader industry, as the filing outlines clear processes for custody, liquidity, and price monitoring, which could enhance Coinbase’s business prospects and industry adoption.
