The Bitcoin price rallied soon after the spot BTC ETF applications by WisdomTree and Invesco on Tuesday. Bitcoin extends its market dominance to 50% of the overall crypto market.
Over the last 24 hours, the world’s largest cryptocurrency Bitcoin (BTC) has seen its price shoot by a staggering 8% moving closer to $29,000 levels. As of press time, BTC is trading at $28,884 with a market cap of $560 billion. The recent catalyst to the BTC price surge has been a flurry of applications for the spot Bitcoin ETF over the last week.
Bitcoin ETF Applications and Their Impact on BTC Price
On Monday, two asset managers WisdomTree and Invesco filed for spot Bitcoin ETFs with the US SEC. These filings come within a week after financial behemoth BlackRock filed for a spot Bitcoin ETF. Another catalyst to the Bitcoin price rally was crypto exchange EDX Markets, backed by firms including Citadel Securities, Fidelity Digital Assets, and Charles Schwab Corp. announcing to start operations.
Tuesday’s filing from WisdomTree notes that the WisdomTree Bitcoin Trust would be listed on the Cboe BZX Exchange under the ticker BTCW. On the same day, $1.5 trillion asset manager Invesco also filed for a spot Bitcoin ETF. This is for the second time that both players have submitted their Bitcoin ETF application to the SEC. Back in 2021, Invesco had filed for a futures-based Bitcoin ETF but pulled out the application at the last moment.
The SEC has been reluctant to approve Bitcoin ETFs, including previous attempts by WisdomTree. The regulator has expressed concerns about risks such as fraud and manipulation in the spot market for Bitcoin. However, it has permitted Bitcoin ETFs based on futures contracts. Speaking to Bloomberg, Hayden Hughes, co-founder of social-trading platform Alpha Impact said:
“The rally is backed by institutional demand. The BlackRock announcement on a Bitcoin ETF, plus EDX Markets, gave Bitcoin a boost on hopes that traditional institutions will add depth to the crypto market.”
As said the SEC has denied several applications for the spot Bitcoin ETF over the past few years. However, with the world’s top financial giants throwing their weight behind this, things could be a bit different this time.
Soon after the BlackRock filing, there’s renewed optimism among Bitcoin investors. Interestingly, the share price of the Grayscale Bitcoin trust also rallied by a staggering 25% after the BlackRock filing. In the days following the submission of the iShares Bitcoin Trust application by the world’s largest ETF issuer, the Grayscale Bitcoin Trust (ticker GBTC), valued at $16.9 billion, has exhibited superior performance compared to the actual cryptocurrency. Consequently, the discount of GBTC’s underlying Bitcoin holdings has decreased to approximately 37%, compared to the 44% discount observed a week ago.