Bitcoin Soars Above $35,000 Amid US Spot Bitcoin ETF Hopes

Bitcoin recently surged past the $35,000 mark for the first time since May 2022, fuelled by optimism around exchange-traded funds. As of Tuesday morning in Singapore, Bitcoin rose as much as 11.5% to peak above $35,000, reflecting a year-to-date rally of 109% since the digital-asset rout in 2022.

This surge in Bitcoin value is stimulated by the potential approval of the first US spot Bitcoin exchange-traded funds (ETFs) in the coming weeks. Heavyweights in asset management such as BlackRock Inc. and Fidelity Investments are among those vying to offer these products. Proponents of digital assets posit that the introduction of ETFs would enhance the adoption of cryptocurrency.

A noteworthy development is the US federal appeals court's official approval of Grayscale Investments' proposition to establish a spot Bitcoin ETF despite objections from the US Securities and Exchange Commission (SEC). Previously, the SEC resisted approving ETFs that invest directly in Bitcoin due to risks like fraud and manipulation in the base market. However, this court ruling coupled with interest from investment goliaths has intensified speculation that the SEC could relent.

Notably, iShares Bitcoin Trust, operated by BlackRock, was listed on the Depository Trust and Clearing Corporation (DTCC). This listing is one of the key steps required prior to launching an ETF.

In recent trading, other digital assets like Ether and smaller coins such as BNB, XRP and Dogecoin have also gained value, riding on Bitcoin’s upswing. Nonetheless, Bitcoin's correlation with traditional assets like stocks, bonds, and gold has diminished recently, raising questions about mainstream investors' involvement.

This event unfolds just as the SEC amplifies its crackdown on cryptocurrency following last year's market crash and the bankruptcy of the FTX exchange. Despite this, analysts remain confident that the approval of a spot Bitcoin ETF seems inevitable, though the timeline is uncertain.