Bitcoin and other cryptocurrencies experienced a slight decline on Thursday. However, despite this dip, digital assets remain at relatively high levels, giving hope to investors that regulators may soon approve a spot Bitcoin exchange-traded fund (ETF). The arrival of this key catalyst has been anticipated for months within the crypto market.
Over the past 24 hours, the price of Bitcoin has slipped by 1%, settling at $28,250. This price point places it in close proximity to its highest consistent levels since mid-August, following a rally that commenced last Friday. Optimism surrounding the upcoming ETF approval has injected fresh vigor into the market as it is expected to attract a greater number of retail and institutional investors, thus fostering wider cryptocurrency adoption.
Edward Moya, an analyst at broker Oanda, states, “Bitcoin is hovering near the upper boundaries of its recent range as optimism grows that a spot Bitcoin ETF approval will happen before the end of the year.”
In light of this news, traders are highly attentive to the possibility of the Grayscale Bitcoin Trust transitioning into an ETF. Additionally, there is speculation that the Securities and Exchange Commission may greenlight spot Bitcoin ETFs offered by BlackRock and other established financial institutions.
Crypto Catalysts Propel Bitcoin amid Macro Headwinds
Amidst the turmoil in the stock market this week, Bitcoin has found support from crypto-native catalysts, allowing it to remain buoyant. While the Dow Jones Industrial Average and S&P 500 have been affected by macroeconomic headwinds, Bitcoin experienced a spike above $30,000 on Monday. This surge was triggered by a false report claiming that the first Bitcoin ETF had been approved. This incident underscores the potential return of volatility to the crypto markets, which have been relatively stagnant in recent months.
According to Alex Thorn, head of research at Galaxy Digital, if the headline had been real, Bitcoin may have even surpassed $35,000 by the end of Monday. Thorn highlights that a genuine announcement would have likely resulted in a more sustained impact on the market. The fact that Bitcoin is currently maintaining higher levels than last week suggests a repositioning and reevaluation of the likelihood of an ETF.
While Bitcoin remains in focus, Ether, the second-largest cryptocurrency, experienced a 2% drop to $1,550. Similarly, altcoins such as Cardano and Polygon recorded a 2% decline. The trend also extended to memecoins, with both Dogecoin and Shiba Inu falling by 2%.