The price of bitcoin breached the $34,000 level to hit its highest since May last year, bolstered by positive sentiment about a bitcoin exchange-traded fund.
The world’s largest cryptocurrency was trading 4.97% higher at $34,596.40 on Tuesday, according to data from Coin Metrics.
Ether, the second-biggest digital coin, surged to its highest since August, according to Coin Metrics data.
“The real catalyst that created the ‘god candle’ earlier today and pushed bitcoin above $34,000 was the $167 million in short liquidations, mainly on offshore exchanges,” said Ryan Rasmussen, analyst at Bitwise Asset Management.
A U.S. federal appeals court recently formalized a victory for Grayscale Investments in its quest to launch a spot bitcoin ETF, despite objections from the U.S. Securities and Exchange Commission. The SEC has been historically cautious about permitting ETFs that invest directly in bitcoin, citing concerns like market manipulation and fraud. However, analysts believe the court ruling, coupled with strong applications from industry leaders, might finally make the SEC budge.
Eric Balchunas, Bloomberg Intelligence ETF analyst, took to X—the platform once known as Twitter—to announce that BlackRock's iShares Bitcoin Trust has been listed on the Depository Trust and Clearing Corp. with the ticker IBTC. "This is pretty much checking every box that you need to check before you launch an ETF," Balchunas said.
High volatility last week also led to a surge in trading activity, according to Matteo Greco, a research analyst at Fineqia.
The moves began with about $100 million in liquidations that followed a false report about the BlackRock bitcoin ETF being approved. The volatility ended with the cryptocurrency’s climb to $30,000 on optimism around updated ETF filings and comments from big wigs such as BlackRock CEO Larry Fink and hedge fund manager Paul Tudor Jones.
“Bitcoin has been the recipient of most of these positive catalysts, and BTC dominance is now the highest it has been since early 2021, with the bellwether digital asset grabbing market share from ETH and stablecoins,” added David Lo, Bybit’s head of financial products in a Telegram message. “However, there may be some selling pressure on the horizon for GBTC as the discount gap narrows; there may be some who bought at the lows of 40% discount looking to sell into these prices.”
Quinn Thompson, Maple Finance’s Head of Capital Markets and Growth, believes that bitcoin is emerging as the modern equivalent of gold, serving as a refuge for investors during economic uncertainties, echoing BlackRock CEO Larry Fink’s description of the recent crypto rally as a “flight to quality” amid global challenges.
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