Bitcoin has rallied to its highest price in nearly 18 months on fresh speculation that BlackRock will get its long-awaited ‘spot ETF’ off the ground.
The worlds biggest cryptoasset by market capitalisation was up 5.5 per cent by Tuesday afternoon in UK trading to $34,766.80, having jumped by a further 10 per cent in the previous session.
The continued rally, which has seen crypto-adjacent stocks like US-listed Coinbase trading higher, will leave investors cautious of another false dawn after a false report last week on a bitcoin ETF approval led to similar price action.
Bitcoin boom: The price of the crypto rocketed on unconfirmed Blackrock rumours
Analysts expect regulatory approval for the Blackrock Bitcoin Spot ETF will clear the way for the launch of a vehicle capable of revolutionising how investors gain exposure to the cryptoasset.
But the US Securities and Exchange Commission has dismissed previous reports of its impending approval, with regulatory documents showing the ETF remains in the regulators’ ‘clearing’ stage.
An exchange traded fund tracking bitcoin’s spot price would in theory give investors a chance to invest in the world’s biggest cryptocurrency without having to own it directly, which can be both risky and technically challenging.
In theory, the ETF would offer easier and safer exposure than buying crypto through unregulated platforms, as it trades on regulated markets.
The SEC is yet to approve a spot bitcoin ETF and Blackrock is not alone in seeking approval, with rival asset managers Fidelity and Invesco also filing application.
The regulator has so-far argued, however, that the fund managers have yet to prove they can protect investors from market manipulation.
Bitcoin ETFs are available in Canada, for example, but a green light from the US regulator would open the door for billions of dollars in inflows.
A recent US court ruling found the SEC was wrong to reject an application from Grayscale Investments to create such a fund, and reports suggest the regulator will not appeal the decision.
Steve Clayton, head of equity funds, Hargreaves Lansdown: said: ‘Bitcoin, the cryptocurrency that, like other cryptocurrencies, has no purpose or fundamental value whatsoever, saw a double-digit price jump in trading overnight, hitting $35,000 at one point as investors warmed to the potential for the launch of Bitcoin ETFs in coming weeks.
‘In other words, people have piled in, in the expectation that many others will pile in afterwards, squeezing the price higher. It’s tulip fever all over again.’
