Bitcoin crosses $35,000 Mark
Bitcoin is surging again- In a stunning turn of events, Bitcoin, the world’s most famous cryptocurrency, has soared to new heights in 2023, briefly crossing the $35,000 mark. As per Coin Metrics, Bitcoin experienced a phenomenal 10% increase, reaching $34,624.82 on Tuesday, with a late-night peak of $35,113.29 – a level not seen since May 8, 2022. This surge signifies a remarkable 110% rise from its 2022 low, stunningly boosting investor morale.
This remarkable rally, attributed to growing positive sentiment around a Bitcoin exchange-traded fund (ETF) and a wave of short liquidations, has captivated investors and cryptocurrency enthusiasts alike. Let’s delve into the details of this unprecedented surge and the factors contributing to it.
One of the primary drivers behind this surge is a short squeeze. Bitcoin witnessed a staggering $275.45 million in short liquidations on Sunday, followed by an additional $100.44 million on Monday, as reported by crypto data provider CoinGlass. Ryan Rasmussen, an analyst at Bitwise Asset Management, highlighted the significance of these short liquidations and how they created a sudden upswing in Bitcoin’s price.
The anticipation of a Bitcoin ETF gained momentum following a court ruling favoring Grayscale, a crypto-focused asset manager, in its quest to transform the Grayscale Bitcoin Trust (GBTC) into an ETF. Last week, the SEC chose not to appeal this ruling by the key deadline, igniting hopes that a Bitcoin-related ETF might gain approval in the coming months.
A Bitcoin ETF would provide investors with a vehicle to participate in Bitcoin’s price movements without the need to directly own the cryptocurrency. This development appeals to investors who have been cautious about the extreme volatility associated with Bitcoin.
Leading financial institutions, including BlackRock, Invesco, Fidelity, and Grayscale, have been actively advocating for Bitcoin ETFs and have submitted applications to offer these assets. They present Bitcoin ETFs as a safer investment option compared to direct crypto investments, which are renowned for their speculative nature and price fluctuations.
Coinbase, a prominent cryptocurrency exchange, expressed confidence in the approval of a U.S. Bitcoin exchange-traded fund by the U.S. SEC, further fueling the belief in Bitcoin’s brighter future.
The cryptocurrency industry closely monitors these developments as they could signal a potential resurgence in the sector. Over the past year, the crypto world witnessed several high-profile scandals and controversies, from FTX’s bankruptcy to legal challenges faced by Terraform and its CEO, Do Kwon.
“The real catalyst that created the ‘god candle’ earlier today and pushed bitcoin above $34,000 was the $167 million in short liquidations, mainly on offshore exchanges,” Ryan Rasmussen, analyst at Bitwise Asset Management, told CNBC.
“I don’t think anyone expected the level of price action we’re seeing, and those investors who were shorting bitcoin in the $33,000 plus range are certainly feeling the pain of that surprise,” he added.
Bitcoin- A Rollercoaster Ride:
Bitcoin’s price trajectory has been nothing short of a rollercoaster. It reached an all-time high in November 2021, surpassing $65,000, only to plummet to around $16,000 a year later. This dip was exacerbated by FTX’s demise and subsequent bankruptcy filing.
The U.S. SEC has remained vigilant in its scrutiny of crypto firms, with companies like Coinbase and Ripple entangled in legal disputes. These firms have criticized the lack of regulatory clarity around cryptocurrencies and have even considered leaving the U.S. in response to the SEC’s crackdown.
In a year filled with uncertainties and legal battles in the crypto world, Bitcoin’s resurgence offers a glimmer of hope for investors and enthusiasts. The potential approval of a Bitcoin ETF and the intriguing dynamics of short squeezes have propelled Bitcoin to new heights. The cryptocurrency market continues to evolve, with investors closely watching for further developments.
