The cryptocurrency is trading at its highest level since late May on optimism over the possible launch of a bitcoin ETF
The price of bitcoin jumped above $8,000, extending a rally that has lifted the largest cryptocurrency by market value to its highest level in two months.
After a dismal first half of the year, bitcoin has shown signs of life in recent weeks. It hurdled back above $6,000 a token in late June, surpassed $7,000 last week and exceeded $8,000 on Tuesday. The 25% gain so far in July puts bitcoin on pace for its second biggest monthly gain this year.
Bitcoin recently traded at $8,200, its highest level since May, according to research site CoinDesk.
Bitwise Asset Management Inc., a San Francisco asset manager specializing in cryptocurrencies, on Tuesday filed with the SEC for permission to launch an ETF that would track an index of the top 10 cryptocurrencies such as bitcoin and Ethereum.
Such instruments could boost bitcoin’s valuation by opening it up to a broader range of investors.
“There are a lot of rumors that a bitcoin ETF is finally going to be approved,” said Adrian Lai, managing director at BlackHorse Group, a cryptocurrency investment firm in Hong Kong. “I’m not so sure. It’s too optimistic to think it’s actually going to happen but the market is reacting really well to this speculation.”
The SEC has previously been resistant to approving such products. In January, Wall Street’s top regulator all but shut the door to approving ETFs that hold bitcoin and other cryptocurrencies. The agency questioned whether such products could comply with rules meant to protect individual investors. Van Eck and SolidX, both based in New York, have said their proposal was designed to address the SEC’s main concerns.
The recent rebound also helped lift rival digital currencies such as ether and ripple, pushing the market capitalization for the entire cryptocurrency market back above $290 billion, according to research site Coinmarketcap.com. But bitcoin has recently started to separate itself from the pack. Bitcoin’s market cap has risen to 47% of the entire market, up from 33% in January.
Even after the latest surge, bitcoin is still down about 60% from its peak late last year. The selloff represents a stark turnaround from 2017, when bitcoin soared from under $1,000 to nearly $20,000, a manic run that attracted mainstream interest all over the world.
Mr. Lai at BlackHorse said the excitement over ETFs showed many in the market were latching on to any reason to be optimistic. “The bear market has been going on for quite a while now.”
Read more at: WSJ