A Wild Few Minutes Drive Bitcoin Above $35,000 as ETF Excitement Starts to Thaw the Crypto Winter

BTC hasn't seen these lofty levels since May 2022, when the cryptocurrency industry was just starting to get pummeled by scandals.

AccessTimeIconOct 24, 2023 at 12:08 a.m. UTC
Updated Oct 24, 2023 at 1:57 a.m. UTC
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It was exciting enough for crypto observers when bitcoin (BTC) topped $31,000 on Monday.

And then its price went straight up. Late in the day, bitcoin took out $32,000, then $33,000, then $34,000 and finally $35,000 in just a few minutes. Perpetual contracts listed on Binance's exchange almost topped $36,000.

The original cryptocurrency was back at levels last seen in May 2022, before the Terra-Luna, Three Arrows Capital, Genesis and FTX debacles turned the mood so sour that BTC approached $15,000 and the very survival of the industry was, to some, called into question.

But the mood has improved markedly, fueled largely by prospects that bitcoin ETFs – which promoters say will make it dramatically easier to buy BTC, potentially hugely broadening the pool of potential investors – are on the way.

Grayscale (which, like CoinDesk, is owned by Digital Currency Group) runs the biggest exchange-traded bitcoin product at the moment, but it's structured as a trust, which has shortcomings. The U.S. Securities and Exchange Commission rejected its attempt to turn the product into a more-appealing ETF, but a court recently blasted that rejection and the SEC isn't appealing, boosting the odds Grayscale will get itself an ETF.

And BlackRock, the world's largest asset manager, is high on bitcoin's prospects and has its own bitcoin ETF application in at the SEC – as do other conventional financial firms. "We're hearing from clients around the world about the need for crypto," BlackRock CEO Larry Fink recently told Fox Business.

Fink put crypto in rarified company during the interview, saying it will be another haven asset for investors, similar to U.S. Treasuries or gold. "I believe crypto will play that type of role as a flight-to-quality," he told Fox Business.

The BlackRock ETF has just showed up on the website of Depository Trust & Clearing Corp. – a key market utility in the U.S. that processes all securities transactions. A normally boring page showed the prospective security with a unique ID number known as a CUSIP, something all manner of stocks, bonds and other assets get. Its appearance on that page doesn't mean the ETF has been approved, but the fact that BlackRock has gone this far in its prep work certainly indicates optimism.

"All part of the process of bringing ETF to market," Bloomberg Intelligence analyst Eric Balchunas posted on X.

In the hour around the rapid late-Monday BTC surge, more than $167 million in derivative positions were liquidated, adding to the daily total of $344 million, according to CoinGlass. Open interest, a metric that records the notional value of all derivatives positions, failed to keep pace with bitcoin's rise, dropping from a peak of $10.5 billion to $9.4 billion as a result of liquidations, short positions being stopped out and those in long positions taking profits.

There is also an emerging narrative pointed out in Galaxy Digital's latest market report about the options market. At around $32,500, "options dealers will need to purchase almost $20 million of BTC for every 1% move up to stay delta neutral," the report said.

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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Nick Baker

Nick Baker is CoinDesk’s deputy editor-in-chief and a Loeb Award winner. His crypto holdings are below CoinDesk's $1,000 disclosure threshold.

Oliver Knight

Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.


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