With Bitcoin again sitting comfortably above $8,000, analysts are asking what is driving the current positive sentiment. Prices are up around 30% on last month, and have risen 10% in the last week.
The main driver appears to be speculation that the Securities and Exchange Commission (SEC) is leaning towards allowing the first cryptocurrency exchange-traded fund (ETF). Even more positive, that decision is expected as early as August.
SEC coming round on ETFs?
On Tuesday this week Bitwise Asset Management filed a registration with the SEC to create the Bitwise HOLD 10 Cryptocurrency Index Fund. If approved it would be the first publicly traded index fund for cryptocurrency.
Last year the SEC rejected the Winklevoss twins’ application for the Winklevoss Bitcoin Trust ETF, and in January asked twelve applicants to withdraw their proposals for new crypto products.
On the speculation, Kyle Samani of hedge fund Multicoin Capital told Bloomberg that he’s been “seeing this chatter as well” but that he believed it to be “largely unfounded.” “If you read the ETF rejection from earlier this year,” he said, “the SEC listed quite a few reasons why they rejected it. Most of those issues have not materially changed.”
The return of positive sentiment
There are other factors contributing to market optimism. BlackRock Inc, the world’s most significant asset manager, is apparently considering investing in Bitcoin futures contracts, though its chairman was careful to note that his clients were not clamouring for Bitcoin exposure.
Though regulators worldwide have expressed caution over the development of the cryptocurrency space, particularly as it relates to money laundering, so far the much feared widespread bans have failed to materialise.
As Timothy Tam, CEO of cryptocurrency data analysis company CoinFIi, told Bloomberg, “we’ve been in depressed levels for the last six months.” That being the case, there’s “really one way from here, which is up.”
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