Bitcoin price (BTCUSD) soared to its highest level of the year and is up nearly 90% as investors return to the largest cryptocurrency by market capitalization after a tumultuous 13 months for crypto markets that saw several bankruptcies and exchange failures.
Key things
- The price of bitcoin on Friday reached well above $31,000 since the beginning of the year.
- BlackRock’s ETF application has increased investor interest in this cryptocurrency.
- The SEC also approved a twice-leveraged ETF to begin trading on Tuesday.
While that’s less than half of its November 2021 all-time high of around $68,000, the price of bitcoin broke $31,000 for the first time since April when it briefly touched $31,005. Previously, the cryptocurrency had not traded above $30,000 since June 2022, before the turmoil that eventually led to FTX collapse in November.
What drives Bitcoin prices up?
Bitcoin has seen renewed interest after asset management giant BlackRock (BLK) submitted an application for a spot bitcoin exchange-traded fund last week. BlackRock’s filing says its iShares Bitcoin Trust will not issue any new shares without being backed 1:1 BTC.
For example, other traditional financial institutions such as Invesco (IVZ) and Wisdomtree (WT), followed by a set of improvements to previously rejected applications.
Investors now hope so Securities and Exchange Commission (SEC) approval of these new ETFs could lead to an increase in trading volumes of digital assets. So far, the regulator has rejected spot applications for bitcoin ETFs.
However, in a surprise move, the SEC has given approval to a 2X leveraged bitcoin fund. And 2X leveraged ETF would technically be considered riskier than a spot ETF. Volatility Shares’ 2X Bitcoin Strategy ETF will trade under the ticker BITX starting June 27.
The cryptocurrency sector has been reeling from the collapse of the FTX exchange and a tough regulatory environment this year. Cameron Winklevoss, Founder worried Gemini and Genesis crypto firms said the “window” to buy bitcoin before the ETF’s “sailgates” open is “quickly closing.”