'We are so back': Making sense of the Bitcoin bump
Proclamations of crypto winter's end may still be premature, but the recent surge in the Bitcoin price does tell an important story.
Sam Bankman-Fried became the face of crypto’s frenzied 2021 bull run and, after his FTX empire imploded, the butt of its subsequent collapse. So it's not without irony that crypto has seen renewed signs of life ever since SBF's trial began in October.
In the space of four weeks, the price of Bitcoin soared over 30% to nudge USD38,000 on 10 November, the first time it’s neared that value since central bankers started hiking interest rates in April last year. Ether, the second biggest cryptocurrency, is up a similar percentage, to around USD2,000.
Crypto is notoriously volatile, prone to double-digit percentage swings that are not always readily explicable. And the Bitcoin price is still well down from its record high of nearly USD69,000 in November 2021. But most of the recent fuss relates to speculation that the US Securities and Exchange Commission would approve BlackRock’s application to launch a Bitcoin ETF in the United States by February. That came after the SEC chose not to fight a court’s decision opening Grayscale’s path to launch its own Bitcoin exchange-traded fund.
A Bitcoin ETF, swimming in the massive liquidity pool that is the US sharemarket, is seen as something of a holy grail for crypto investors. Though the cryptocurrency has gone mainstream, buying it typically requires going through crypto exchanges like Coinbase and Binance or the technical knowhow to navigate MetaMask wallets and decentralised trading apps. An openly traded ETF, listed on major US stock exchanges, would make it much easier for traditional investors to buy in, and for investment managers to allocate funds into the burgeoning asset class.
