In a surge of bullish sentiment, Bitcoin recovery reached nearly $29,000, marking its highest level in two months. The price spike followed several major asset management firms, including Fidelity, amending their proposed spot Bitcoin ETF filings.
Fidelity, a leading asset management firm, has submitted a revision to its planned Bitcoin ETF focused on spot trading. The amendment is known as the Wise Origin Bitcoin Trust, with the US Securities and Exchange Commission (SEC). It addressed crucial details, such as the safeguarding of customers’ Bitcoin in custody accounts. Moreover, the disclosure of risks associated with cryptocurrencies’ evolving regulatory landscape is also under the radar.
Fidelity’s amendment follows similar actions by Ark Invest and Invesco, which modified their spot Bitcoin ETF filings. This series of amendments indicates active communication between prospective ETF providers and the SEC, suggesting a potential breakthrough in the Bitcoin ETF approval process. These developments have played a significant role in fostering bullish sentiment among traders and market observers.
Anticipation of a spot Bitcoin ETF gaining approval has kindled optimism in the market. Analysts believe that if approved, such an ETF could add over $1 trillion to the overall market capitalization. Currently, it stands at $1.1 trillion. The recent spike in Bitcoin prices due to false rumours of ETF approval suggests strong investor interest. However, genuine approvals by the SEC will most likely result in even more substantial price increases.
A recent false report regarding the approval of a spot Bitcoin ETF proposal by BlackRock led to a sudden 7.00% surge in Bitcoin’s price to approximately $30,000. Subsequent confirmation that the SEC had not granted approval caused the price to stabilize at around $28,375.
The expectation that a Bitcoin ETF will be approved soon has fueled market expansion and price growth predictions. Experts suggest that this easily accessible ETF product may attract retail investors. Besides, retirement accounts, institutional investors and even corporate treasury departments might express interest. The market strategist of LMAX Group, Joel Kruger, foresees a significant Bitcoin to USD price rally, possibly surpassing $42,000.
The US Securities and Exchange Commission will be ruling on a planned Bitcoin ETF by Ark Invest by January 10. Decisions regarding similar products proposed by BlackRock, Fidelity, and other firms could be delayed until March. While some uncertainty remains in the market, the successful court ruling in favour of Grayscale Investments offers hope for future ETF approvals.
Grayscale’s Bitcoin Trust (GBTC) has also seen substantial price changes, with the discount on GBTC shares decreasing from over 40.00% to 14.77%. This discount reduction suggests investor anticipation of an ETF approval and reflects the evolving sentiment in the market.
Despite ongoing uncertainty and confusion stemming from the SEC’s actions, the Bitcoin recovery remains on the horizon. The market is closely monitoring developments and preparing for what could be a substantial boost in market capitalization and investor participation.
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