Awaiting the ETF: industry players explain Bitcoin’s rally

In the past month the price of the leading cryptocurrency has risen about 25%, largely thanks to American investors and the excitement surrounding approval of a spot Bitcoin-ETF. Matrixport analysts said.

#Bitcoin‘s relentless climb continues, up +25% in 30 days, largely driven by #US investors and anticipation of a US-listed spot #BitcoinETF. ??#Crypto market cap rebounds to $1.25tn, with Bitcoin accounting for $50bn in trading. Amid market frenzy, Bitcoin remains the… pic.twitter.com/2WT953opCA

— Matrixport (@realMatrixport) October 25, 2023

According to experts, the market capitalisation of the digital-asset market rose to $1.25 trillion, with Bitcoin accounting for $50 billion in trading volume.

On October 24, the price of digital gold tested $35 000, corresponding to early May 2022 levels. The rally in the flagship significantly revived altcoins.

“In the midst of market frenzy, the first cryptocurrency remains the king of performance. But watch for the normalisation of funding rates and the high level of volatility. Smart traders use spread calls to secure steady profits,” said Matrixport.

Despite aggressive short-covering, Bitcoin continues to dominate with a 53% share.

Matrixport’s own ‘Fear & Greed Index’ is currently at 99, and the RSI stands at 87%. Based on these data, analysts forecast a ‘likely pause in the bull market’.

Gio Vichiolo, head of the CME’s cryptocurrency unit, told BlockWorks that the platform has already ‘prepared’ for the impending rally.

“The investor community is buzzing with anticipation of approval for the spot Bitcoin ETF,” he stressed.

According to him, this is not limited to retail traders. Riding the wave of hype, a range of participants are entering the market, including “crypto natives, funds oriented to digital assets, as well as some institutional investment organisations and banks”.

He backed his words with a CME report for Q3, according to which interest in Bitcoin and Ethereum derivatives reached a maximum.

The CME chief also noted that the impulse from the fake news Cointelegraph about the approval of a spot Bitcoin ETF from BlackRock demonstrated that “the investor community is preparing for a specific event and positioning their portfolios accordingly”.

“I’m not sure the time for a crypto spring has arrived, but digital assets appear to have many positive catalysts ahead,” said eToro analyst Kelly Cox.

Michael Silberberg, head of investor relations at Alt Tab Capital, believes the current rally will run until April 2024.

But Vichiolo noted that the story isn’t only about ETF interest — the market is also being propelled by tokenisation of traditional assets:

“This is driving greater interest in Bitcoin and Ethereum, since tokenisation rests on blockchain technology. We are seeing many institutions discuss how to implement these tools, and I think this also helps raise the value of individual coins led by the first cryptocurrency.”

In July, the SEC began considering applications for spot Bitcoin ETFs from BlackRock, VanEck, Invesco, Fidelity Investments and WisdomTree. Later joined Franklin Templeton.

On 31 August, the regulator delayed a decision on several applications at least until mid-October. At the end of September the regulator moved the review of documents to January 2024.

As noted, in October Matrixport analysts forecast growth in digital gold following approval of a spot Bitcoin ETF to $42 000-56 000. CryptoQuant, meanwhile, reported values of $50 000-73 000.