Bitcoin Surges Nearly 10% to Reach 18-Month High Amid ETF Speculation

Bitcoin, the world's premier cryptocurrency, experienced a staggering 10% surge on Tuesday (24/10), rocketing to $34,872, marking its highest valuation in nearly a year and a half.

This surge was primarily driven by a mounting wave of speculation surrounding the imminent arrival of an exchange-traded Bitcoin fund.

This bullish momentum came on the heels of another impressive 10% gain on Monday (23/10), marking Bitcoin's best performance in nearly a year.

This surge didn't just affect Bitcoin itself; it also rippled through the wider cryptocurrency market, buoying related stocks.

The catalyst behind this fervor is the potential approval by the U.S. Securities and Exchange Commission (SEC) of an exchange-traded fund (ETF) that would manage Bitcoin on behalf of investors.

Experts predict that such approval would significantly boost the demand for Bitcoin.

The argument in favor of a spot Bitcoin ETF is that it would provide access to the cryptocurrency for previously cautious investors through the stock market, potentially ushering in a fresh wave of capital into the digital asset sector.

At the time of reporting, Bitcoin had risen by 7.87%, reaching $34,020, a level not seen since May 2022. It had even surpassed the $35,000 mark during Asian trading hours.

Ether, the second-largest cryptocurrency, also witnessed substantial growth, climbing by 4.50% to reach $1,786.30, its highest valuation since August.

Notably, shares associated with the crypto market, such as major U.S. exchange Coinbase Global (COIN.O) and Bitcoin-holding company MicroStrategy (MSTR.O), experienced significant gains, rising by more than 7% and 12%, respectively.

Antoni Trenchev, co-founder of digital asset firm Nexo, expressed the general sentiment in the crypto market, stating, "A sense of excitement has erupted in the crypto market, and now it’s just a case of waiting to see if and when something concrete emerges from the SEC."

Furthermore, there's growing speculation about the approval of Bitcoin ETFs from major U.S. financial firms, with investment giant BlackRock (BLK.N) among them.

Fueling this speculation was the appearance of BlackRock's iShares ETF listing on the website of the clearing house DTCC, although the reasons for and timing of this addition remain unclear.

DTCC and BlackRock had not responded to requests from Reuters for comment at the time of this article.

The anticipation surrounding Bitcoin ETFs was further stoked by reports, including those from Reuters, that the SEC would not contest a court ruling which found the agency had been wrong to reject an ETF application from crypto firm Grayscale Investments. On Monday, the court officially reaffirmed this ruling, sending the application back to the SEC for review.

Geoffrey Kendrick, Head of Digital Assets Research at Standard Chartered, noted that "The SEC being pressured by the courts increases the probability" of an ETF approval. In the last 24 hours, data from the crypto derivatives analysis site Coinglass revealed significant short-covering activity in the Bitcoin market.

Tom Wilson and Tom Westbrook / Reuters