Bitcoin (BTC-USD) surged above $35,000 in its largest single-day jump in 13 months, fueled by optimism that regulatory approval of the first spot bitcoin exchange-traded fund is nearing.
The world’s largest cryptocurrency moved up more than 10% Monday, its biggest increase over a 24-hour period since September 2022. The price reached its highest point in a year and a half.
The stocks of digital asset companies also pushed higher. Coinbase (COIN), the largest US crypto exchange, opened 13% higher Tuesday while MicroStrategy (MSTR) rose 12%. Bitcoin mining firms Riot Platforms (RIOT) and Marathon Digital (MARA) surged more than 13% and 17%, respectively.
The rally appeared to be driven partly by speculation that the Securities and Exchange Commission was close to granting approval for a spot bitcoin ETF, which would allow investors to get exposure to the cryptocurrency without having to own it.
BlackRock (BLK) is among the money managers that have recently applied to launch such a product.
Bitcoin backers pointed to the listing of BlackRock’s iShares Bitcoin Trust on the website of clearing house Depository Trust and Clearing Corporation (DTCC), while also cheering a suggestion that BlackRock had begun seeding the fund.
A spokesman for DTCC said Tuesday evening that its "standard practice" for the company to add securities to its list, which includes "active and potential" ETFs, in preparation for the launch of a new ETF to the market and that BlackRock's iShares Bitcoin Trust ETF was added in August 2023.
"Appearing on the list is simply an indication that an agent bank has requested a DTCC identifier for an ETF fund, and that DTCC may process that transaction at an undetermined date," said the DTCC spokesman. It "is not indicative of an outcome for any outstanding regulatory or other approval processes," they added.
Speculation about BlackRock also drove prices higher last week when a rumor circulated that the SEC had granted its approval for the spot bitcoin ETF. Prices pulled back when BlackRock denied it. Investors expect the agency will rule on the applications by Jan. 10.
There is another factor behind this week’s price swings, according to crypto market data aggregator Coinglass. Over the past 24 hours, $231 million worth of levered positions on bitcoin have been liquidated by investors, 80% of which were short the digital asset.
The dramatic movements over the last few weeks have some in the crypto community celebrating a return of the enthusiasm that characterized the industry during the early days of the pandemic.
"We are so back," Alex Svanevik, CEO of blockchain analytics firm Nansen, in a post on X, formerly known as Twitter.
We are so back.
— Alex Svanevik 🐧 (@ASvanevik) October 23, 2023
Bitcoin peaked at $68,789 in November 2021 but then crashed in 2022 as the Federal Reserve began raising interest rates and a series of firms imploded, including crypto exchange FTX in November 2022. FTX founder Sam Bankman-Fried is now on trial in Manhattan for multiple counts of fraud.
A widespread crackdown on the crypto industry followed. The SEC sued a number of big players, including Coinbase and Binance.
But since the beginning of January, bitcoin has more than doubled. MicroStrategy, the Virginia-based software company, is the largest public company holding bitcoin. Its stash of 158,245 BTC is currently worth roughly $5.4 billion as of Tuesday morning.
In various tweets over the past month, the company’s founder and executive chairman Michael Saylor, who stepped down as CEO in August 2022, has said of bitcoin that the asset is "a flight to safety," "digital energy," "for the kids," "power," and "forever."
#Bitcoin is Forever. pic.twitter.com/AUIhxc9gbZ
— Michael Saylor⚡️ (@saylor) October 14, 2023
Updated 10/25 with DTCC comments.
David Hollerith is a senior reporter for Yahoo Finance covering banking and crypto.
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