No short-term effect of SEC approval on Bitcoin
Last week was significant for the cryptocurrency market, culminating in the approval by the Securities and Exchange Commission (SEC) of a spot ETF on bitcoin. This event ended a nearly ten years-long waiting period, as highlighted by Simon Peters, market analyst at eToro, in his analysis of January 16, 2024.
Bitcoin's price experienced major fluctuations following this approval. Its price grazed the $49,000 level for the first time in two years on the first day of spot ETF trading, before dropping to $42,000, where it ended the week. At the time of writing, bitcoin was trading at $42,400.
According to Simon Peters, the historic approval of investment funds based on a cryptocurrency could pave the way for an explosive year for bitcoin in 2024, as it provides institutional investors with the opportunity to invest in it through a vehicle with a legal framework.
Towards a spot ETF on Ethereum?
The queen of cryptocurrencies isn't the only one that could benefit from potential enthusiasm. Ethereum, another major crypto asset, outperformed compared to bitcoin following the SEC's announcement. Ether is thus currently up 7% compared to bitcoin, an indicator of its future potential given that ETF futures on cryptocurrencies are already approved and available. Market observers believe that Ether could be the next cryptocurrency to obtain authorization for a spot ETF, given its position as the second-largest crypto in terms of capitalization.
The next week on the cryptocurrency market could, however, be quieter, marked mainly by the next halving of bitcoin, scheduled for April 22, 2024.
According to Simon Peters, it's also important to note that Circle, the issuer of the stablecoin USDC, has filed for an initial public offering. These events are contributing to shaping a rapidly changing cryptocurrency landscape. For the record, last year was marked by a severe crackdown on mining in China, which pushed Bitcoin to strengthen its position as the safest cryptocurrency network. This historical context gives these recent developments particular significance.
