On Thursday, January 11, the price of the first decentralized cryptocurrency, Bitcoin, experienced a notable surge of over 5%, reaching an intraday high of $49,012. This surge came after the US Securities and Exchange Commission (SEC) gave the green light for investment firms to establish Bitcoin exchange-traded funds (ETFs), indicating a potential revival for the world’s largest cryptocurrency by market capitalization.
The daily trading volume for Bitcoin on cryptocurrency exchanges also saw a significant increase to $52 billion, marking the highest level since March 21 of the previous year in New York, as of 7:15 am on Thursday, according to data from CoinGecko.
The approval by the SEC allows 11 investment firms, including major players like BlackRock, Fidelity, and Franklin Templeton, to list Bitcoin-based ETFs on major US exchanges such as Nasdaq and the New York Stock Exchange. This development is seen as a significant milestone that bridges the traditional financial markets with the innovative realm of digital assets.
Nischal Shetty, Co-Founder of Shardeum, highlighted the potential impact, stating that the introduction of Bitcoin ETFs could make Bitcoin more accessible to those comfortable with traditional financial markets. Shetty compared it to gold ownership, suggesting that if Bitcoin ETFs achieve similar figures as gold, it could bring in $50 billion to $80 billion in new liquidity.
Sumit Gupta, co-founder of CoinDCX, emphasized the positive market sentiment surrounding the SEC’s approval, anticipating a substantial boost to Bitcoin’s value. He also predicted increased trading activity and a broader resurgence in the overall cryptocurrency market.
The decision by the SEC comes at a crucial time for Bitcoin and the cryptocurrency sector, which has faced challenges such as falling token values, unsuccessful ventures, and exchange collapses since its peak in November 2021. The approval of Bitcoin ETFs is expected to inject fresh vitality into the market, potentially reversing the downward trend witnessed in recent months.
Avinash Shekhar, CEO of Pi42, views the SEC’s approval as a historic moment for digital assets, anticipating increased adoption by large financial institutions. He sees this as a positive development for the global crypto industry and believes it will encourage more Indian investors to include digital assets in their portfolios, expressing hope for the eventual introduction of a crypto ETF in India.
