Bitcoin rose to start out the week as investors awaited the potential approval of a U.S. bitcoin ETF this week.
On Monday the cryptocurrency rose 1.5% to $44,854.11, based on Coin Metrics, as BlackRock, Grayscale and other potential bitcoin ETF issuers submitted final updates to the Securities and Exchange Commission, including key fee disclosures that bolstered investors confidence that an approval is more likely than not.
“It is a price competition,” said Jim Angel, associate professor specializing in financial market structure at Georgetown University’s McDonough School of Business. “Multiple vendors are coming out of the gate with a virtually similar commoditized product and the one way they’ll compete is on price.”
Earlier, bitcoin rose as high as $45,208.95. The last time it traded over $45,000 was Jan. 3.
The SEC is approaching its first deadline to approve or reject one in all the ETF applications – that of Ark 21 Shares on Wednesday. It’s widely expected the agency will approve several applications without delay to even the playing field.
“Approval is inevitable,” former SEC chair Jay Clayton told CNBC’s “Squawk Box” Monday when asked what could occur this week. “There’s nothing left to make your mind up. … It is a big step not only for bitcoin but for finance generally.”
That will be a landmark decision for the cryptocurrency industry, which has anti-establishment roots but has demonstrated the worth of bitcoin and ether to much of the institutional investing world. Fidelity, Invesco, VanEck, WisdomTree and Franklin Templeton are among the many firms vying to launch a bitcoin ETF together with BlackRock.
Many investors say the day one impact of an approval has been overestimated, but that nevertheless, the event itself would create recent pathways for inflows from institutions with an extended view.
Galaxy Digital, which has partnered with Invesco on its proposed bitcoin ETF, estimates the addressable market size of a U.S. bitcoin ETF to be roughly $14 trillion in the primary 12 months after a launch, and expanding to $26 trillion in the next 12 months and $39 trillion within the third 12 months.
The optimism around bitcoin helped push ether higher by nearly 1%. Several of the identical firms vying for a bitcoin ETF have also filed applications to launch spot ether ETFs. The SEC’s deadline on those will come later within the 12 months. Much of the remaining of the cryptocurrency market was flat.
Meanwhile, crypto equities fell. Coinbase slipped greater than 3%. Among the many miners, Iris Energy and Marathon Digital each were down about 4%, while Riot Platforms fell lower than 2%.
