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At the start of the week, Bitcoin surged as investors anticipated a potential U.S. approval of a Bitcoin Exchange Traded Fund (ETF). On Monday, Bitcoin rose by 1.5%, recording $44,854.11 according to Coin Metrics. BlackRock and Grayscale among other potential Bitcoin ETF issuers provided final updates to the Securities and Exchange Commission (SEC) containing crucial information on fees, which improved investor assurance of a probable sanction. Commenting on the same, Jim Angel, an associate professor with expertise on financial market structure from Georgetown University's McDonough School of Business stated “It's a price war. Multiple vendors are coming out of the gate with a nearly identical commoditized product and the only way they can compete is on price.”
Bitcoin further increased, reaching as high as $45,208.95. Such an elevation had not been observed since the 3rd of January. The SEC has an initial deadline to accept or decline one of the ETF applications on Wednesday, and it is estimated that the agency would give a greenlight to numerous applications in order to preserve fairness. Former SEC chair, Jay Clayton, told CNBC's “Squawk Box” Monday that “approval is inevitable. There's nothing left to decide … This is a big step not just for Bitcoin but for finance generally.” This would be a notable decision for the crypto industry which has confirmed the value of Bitcoin and Ethereum to the institutional investment society, and has encouraged Fidelity, Invesco, VanEck, WisdomTree and Franklin Templeton to apply for a Bitcoin ETF alongside BlackRock.
Though many investors argue that the exact impact of this approval would be exaggerated, they agree that new pathways for inflows from organizations with a long-term vision will be created. Galaxy Digital partnering with Invesco on its proposed Bitcoin ETF approximated a total addressable market size of $14 trillion in the first year after release, which would rise to $26 trillion and $39 trillion respectively in the succeeding two years.
Following Bitcoin's success, Ethereum too witnessed a notable 1% rise. A few of the same firms involved in the Bitcoin ETF applications have also filed for a spot Ether ETF which the SEC will be deciding on at a later date. Most of the rest of the crypto market had quite a steady day. However, crypto-equities were mainly negative. Coinbase dropped more than 3%, while Iris Energy and Marathon Digital dropped approximately 4%. Riot Platforms’ fall was not as steep and was of less than 2%.
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