Bitcoin
and other cryptocurrencies weakened Thursday, but digital assets remained at relatively elevated levels as hopes persist that regulators will soon approve a spot Bitcoin exchange-traded fund—a key catalyst for cryptos that has loomed for months.
The price of Bitcoin has slipped 1% over the past 24 hours to $28,250, remaining near the highest consistent levels since mid-August following a rally that began last Friday. The latest injection of optimism comes amid bets that the first spot Bitcoin exchange-traded fund (ETF) could soon begin trading, ushering in a fresh wave of retail and institutional investor interest in cryptos and signaling more widespread adoption.
“Bitcoin is hovering near the upper boundaries of its recent range as optimism grows that a spot Bitcoin ETF approval will happen before the end of the year,” said Edward Moya, an analyst at broker Oanda.
Traders’ attention was focused on the prospect that the
Grayscale Bitcoin Trust
will be allowed to convert to an ETF or that the Securities and Exchange Commission will approve spot Bitcoin ETFs from BlackRock and other traditional financial firms.
A spotlight on crypto-native catalysts has helped Bitcoin remain buoyant amid more macroeconomic headwinds that have hit stocks this week, weighing on the
Dow Jones Industrial Average
and
S&P 500.
Bitcoin even spiked above $30,000 on Monday after a false report that the first such ETF had been approved, highlighting how volatility could soon return to crypto markets that have otherwise stagnated for months.
“Had the headline been real, it’s likely Bitcoin would have tested $35,000 by the end of the day Monday,” said Alex Thorn, head of research at crypto financial services group
Galaxy Digital.
“A real announcement would have likely drawn more sustained follow-through … that Bitcoin is sustaining now at higher levels than last week shows some repositioning and re-pricing of the ETF likelihood.”
Beyond Bitcoin,
Ether
—the second-largest crypto—dropped 2% to $1,550. Smaller tokens, or altcoins, also retreated, with
Cardano
and
Polygon
down 2% each. It was more of the same for memecoins, as
Dogecoin
and
Shiba Inu
both fell 2%.
Write to Jack Denton at jack.denton@barrons.com
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