For the first time since April 2022, the price of Bitcoin (BTC) has surpassed a new record, reaching as high as $47,000.
The huge price shift occurs as the market braces for potentially significant news regarding the regulation of cryptocurrencies, including the approval of a spot exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC).
Bitcoin price hit a low of $40,813.33 on January 3 as Matrixport reported the possibility of denial of a spot Bitcoin ETF product. However, the price stabilized and rose again until it reached over $47,000 in the past 24 hours.
With the rise of the Bitcoin price, its market capitalization and trading volume currently stand at $911,192,300,158 and $42,955,609,239, respectively, according to data from CoinMarketCap.
The market regulator has been hinting at the approval of a spot Bitcoin ETF with several recent meetings with possible trading platforms and security guidance it has been sending to retail investors, warning them not to make irrational decisions about investment products they are unsure of.
Meanwhile, Standard Chartered anticipates that a spot bitcoin ETF may result in new inflows of up to $100 billion. They also mentioned that the price of Bitcoin might hit $200,000 by the end of the year.
“The bullish movement for Bitcoin is almost certainly a response to the very high likelihood that we see spot ETF approval this week,” said co-founder and chief operating officer at crypto hedge fund Alt Tab Capital Greg Moritz.
Spot ETF application progress
The SEC is expected to finalize ETF approval this week. If approved, investors anticipate that the ETF will have a favorable effect on the price of Bitcoin as well as other markets. Increased capital flow into Bitcoin and Wall Street firms’ validation of the sector could usher in a bullish era.
In the meantime, the SEC has given spot ETF applicants to submit amended S-1 forms until January 8 in another step toward approval. The firms that filed the applications include Black Rock, WisdomTree, Fidelity, Invesco, Ark Invest/21Shares, VanEck, and Valkyrie.
The sponsor fees paid by the ETF operators were also disclosed in the filings. According to Bloomberg ETF analyst Eric Balchunas, BlackRock agreed to pay 0.3 percent in sponsor fees. Still, investors should anticipate paying as little as 0.2 percent during the first year or until the ETF reaches the $5 billion asset threshold. VanEck leads the market in the least expensive sponsor fee, at 0.25 percent, while WisdomTree has the highest, at 0.5 percent.
Damn, the fee for BlackRock’s Bitcoin ETF will be 0.30% as per their just filed S-1. This is much cheaper than I predicted. Life just got a LOT tougher for everyone else. The ETF Terrordome is no joke. pic.twitter.com/RZrfO8x61s
— Eric Balchunas (@EricBalchunas) January 8, 2024
At the same time, the rise in Bitcoin has helped support other digital assets. The majority of the gains were seen in other smaller cryptocurrencies, such as Cardano (ADA), Solana (SOL), and Polkadot (DOT), which were up between seven percent and nine percent. Ethereum (ETH) was up roughly 3.8 percent.
The majority of crypto companies also witnessed higher shares. Coinbase Global gained around 2.3 percent, while Marathon Digital and Riot Platforms saw gains of about seven percent. However, MicroStrategy saw a 1.2 percent decline.
Crypto analytics platform Santiment reported that the social mentions of Bitcoin have skyrocketed, with the word “BTC” ranking as the second most trending term after “ETF.”
This increased social sentiment has historically helped to drive up the price of Bitcoin, which underlines the reason for the current massive surge in value. Additionally, data from the Santiment dashboard indicated that the discussions on Bitcoin and ETF reached their highest point since October 17, 2023.