Bitcoin, the world’s largest cryptocurrency by market capitalization, has surged above $31,000 for the first time since June 23, as investors anticipate the potential approval of spot exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC).
Spot ETFs are investment products that track the price of an underlying asset, such as bitcoin, and trade on regulated exchanges. They are seen as a way to bring more institutional and retail investors into the crypto space, as well as to provide more transparency and liquidity.
Several companies, including BlackRock, Fidelity, WisdomTree and VanEck, have recently filed applications for bitcoin spot ETFs with the SEC, following the success of similar products in Canada and Europe. The SEC has not yet approved any bitcoin ETFs in the U.S., but some analysts believe that the regulator may change its stance under the new leadership of Gary Gensler, who is known to be more crypto-friendly than his predecessor.
According to data from NewsBTC, bitcoin reached a new yearly high of $32,410 on Friday, July 23, before retracing slightly to trade around $30,500 at press time. The cryptocurrency has gained over 18% in the past seven days, ending a prolonged period of sideways movement and low volatility.
Some experts attribute the recent rally to the growing demand for bitcoin from institutional investors, who are looking for alternative assets to hedge against inflation and currency devaluation. Others point to the positive sentiment generated by the BlackRock news, which sparked hopes that the world’s largest asset manager could trigger a wave of adoption among other institutional players.
However, not everyone is bullish on bitcoin’s prospects. Jim Cramer, the host of CNBC’s Mad Money, warned his viewers on Monday that investing in bitcoin is risky and volatile, and that he prefers gold as a store of value. He also said that he sold most of his bitcoin holdings when the price was around $50,000, and that he does not plan to buy more anytime soon.
Bitcoin is still down about 50% from its all-time high of nearly $65,000 in April, when it was boosted by the listing of Coinbase, the largest U.S. crypto exchange, on Nasdaq. The cryptocurrency has faced several challenges since then, including regulatory crackdowns in China and other countries, environmental concerns over its energy consumption, and technical issues such as network congestion and scalability.
Despite these hurdles, many analysts and investors remain optimistic about bitcoin’s long-term potential, especially as more innovation and adoption take place in the crypto industry. Some even predict that bitcoin could reach six or seven figures in the future, as it becomes a global reserve currency and a digital gold.
