The digital coin that keeps on giving; Bitcoin once again has been surging. Bitcoin has been on somewhat of a roller-coaster this October. After crossing the $55,000 mark, the coin corrected to $52,000. But once again, BTC is soaring and is heading towards the next resistance line of $60,000. With huge news from the Securities and Exchange Commission (SEC) regarding a possible Bitcoin exchange-traded fund (ETF), the market sentiment is once again bullish. As it stands, the biggest cryptocurrency in the world has a market valuation of $3.2 trillion, and is closing in on Apple.
Bitcoin soars to $57,000
The week beginning Monday 11th October, saw Bitcoin trading in green once again after a lot of positive news which had been circulating around the crypto space. For the first time since October, Bitcoin traded above $57,000, totaling in on a profit of 32% in October alone.
What is interesting to note is that the rest of the crypto market has been relatively quiet. Ethereum and Cardano have not experienced much movement. Shiba Inu remains to be the only coin that has been surging at the same level of BTC, after having a monstrous growth of 350% in the first week of October.
BTC’s positive price performance in the month of October means it’s market cap surpassed $2 trillion. As it currently stands, the ‘volatile’ crypto as investors like to deem it is worth more than the biggest tech giants in the world. Amazon, Alphabet and Microsoft, are all currently valued under BTC. As for now, Bitcoin is targeting the biggest tech giant, Apple which is valued slightly under $50 Billion more than the cryptocurrency. With the recent performance in the last few weeks, investors are confident that this barrier can be crossed in the same bull cycle if the highs keep coming.
Why did BTC soar ?
The reason for BTC’s great performance in the last week can be credited to a few factors. To start off, some investors actually believe that China’s ban has positively affected the entire cryptocurrency space in the long-run. If we look back at April, the crypto market was on cloud-9. Alt-coins were buzzing and Bitcoin had just experienced an all-time high of $64,000. But, what followed was a huge market crash that slashed the valuation of most assets by 50%.
BTC was one of the worst-hit, after falling down to $30,000. The biggest reason for this crash was China’s crypto ban. China came out with a sweeping ban on crypto miners in the country, which made up almost 3/4ths of the worldwide crypto mining industry. This triggered a sell-off, and the rest is history.
But many investors and leading crypto experts think that China’s ban will actually benefit crypto and BTC in the long-run.
Paolo Ardoino, the Chief technology officer of Bitfinex exchange said that, ‘Periodic shock tests seem to only make bitcoin grow stronger. The hashrate is recovering to reach a near-all-time high in the wake of China’s ban. We see the king of crypto is once again showing its resilience. In the case of any ban or restrictions on bitcoin, there will always be someone left to fill the void. We expect to see others step up as China’s power diminishes. This is a true testament to the far reach and resilience of the industry’.
BTC does have the capability to come back from most adversities like we have seen in the past. 2017 and 2019 were both challenging years for the cryptocurrency, but it still managed to further rise in valuation. Such is the case in the current bull-cycle. After China’s announcement was made in September, it has managed to bounce back and push the limits even further.
SEC approves Crypto Stock ETF
Another underlying factor which has allowed BTC to soar to levels of just under $60,000, stems from the announcement of a new ETF. Exchange-Traded Funds have normally been a mixture of equity, bonds and debt. But the rumored news of a crypto ETF has been confirmed by the Securities Exchange Commission. The confirmation of the approved ETF means that investors can trade with publicly traded companies that have direct exposure to the likes of Bitcoin.
The statement says that the Volt Industry Revolution and Tech ETF will track performances of companies that are synonymous, ‘Bitcoin industry revolution companies. It will also apply to companies that make part of their profit from Bitcoin mining or building mining equipment. The ETF will prove to be highly volatile, since 80% of the fund’s assets will comprise of crypto stocks while the rest will be normal equity stocks to make up a small chunk of the portfolio. Tad Park, the CEO of the Volt ETF even said that this particular fund was the hardest to approve. ‘It was difficult to get this approved. But we’re really glad that they finally approved it’, said Park in an interview with Insider.
What this means is that although no cryptocurrency itself will be traded in the ETF, it is open to companies which use cryptocurrencies in either trading or mining. The news of a crypto ETF itself has been seen as a huge groundbreaking milestone, given the SEC’s reluctance over cryptocurrencies. With the federal reserve calling for more regulation of cryptocurrencies like Bitcoin and the SEC themselves being caught up in legal battles with XRP, the news is very shocking.
Now, while this ETF is not exactly a Bitcoin only ETF, investors are under the belief that a purely Bitcoin ETF could also be confirmed in the coming months. It would make sense since BTC is the largest crypto in the market and is by far a very stable coin. With the coin competing with the likes of Apple in terms of market valuation, this news would establish some level of trust between the investors and the crypto asset in the long-run.
More countries to accept Bitcoin as legal tender ?
With the price of the coin sky-rocketing and an already confirmed ETF that has been approved by the SEC, some feel countries will follow-suit and make Bitcoin a legal tender, just like in El Salvador. There has been a lot of speculation about the pros and cons of making Bitcoin a legal tender in other countries, but Alex Hoeptner, the CEO of Bitmex exchange believes more countries will join in next year.
Hoeptner says that at least 5 new countries will adopt Bitcoin by the end of 2022. ‘All of them will be developing countries. Over the next year, and as El Salvador works out the kinks in its rollout, savvy politicians might be thinking of how they can take a similar path, and how it might benefit both them and their constituents. What El Salvador did is a leap of faith, making similar moves by other countries much easier to consider’ he said.
As it currently stands, BTC is being traded at $56,294.