Bitcoin (BTC) soared above the $30,000 mark on Friday morning, extending its weekly gains to over 11%. The surge was fueled by growing bullish sentiment surrounding the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the United States. Forks of Bitcoin, Bitcoin Cash (BCH), and Bitcoin SV (BSV), surged as much as 26%, leading gains among alternative tokens in a move that some attributed to irrational exuberance.
The renewed optimism for a spot Bitcoin ETF stems from a flurry of activity in the ETF space in recent days. Several ETF providers have amended their filings with the U.S. Securities and Exchange Commission (SEC), and there is increasing pressure on the regulator to soften its stance on Bitcoin ETFs.
In a letter to SEC Chair Gary Gensler earlier this week, four House Financial Services Committee members urged the SEC to “listen to the courts” and approve Bitcoin ETFs. The letter cited a recent court ruling that found the SEC’s reasons for rejecting a Bitcoin ETF to be “arbitrary and capricious. In addition, hopes of the Grayscale Bitcoin Trust (GBTC) being converted into an ETF have also buoyed sentiment. GBTC is one of the largest institutional Bitcoin holdings, and Grayscale is among several asset managers who have applied for a spot Bitcoin ETF. Other major firms in the race to launch a Bitcoin ETF include BlackRock (BLK), Fidelity, and WisdomTree (WT).
Traders believe that a ruling in favor of Grayscale or the approval of a spot Bitcoin ETF could have a major positive impact on the cryptocurrency market. “Bitcoin has also been encouraged by possible ETF approval and an increasing number of ETF submissions by leading companies,” said Lucy Hu, senior trader at Metalpha.
“The SEC opted for a no-appeal on Grayscale’s ruling, and as the deadline for BTC spot ETF applications from institutions such as Blackrock looms closer, the market’s confidence in ETF approval has increased.” Hu added that the combination of a spot Bitcoin ETF approval and the upcoming Bitcoin halving event in April could “kickstart a very robust bull market” for cryptocurrencies.tunesharemore_vert