The potential approval of the first US spot Bitcoin ETFs in the coming weeks is fueling speculation in the cryptocurrency. Asset managers BlackRock Inc. and Fidelity Investments are among the firms vying to offer such products.
On Monday, a US federal appeals court upheld a ruling in favour of Grayscale Investments LLC in its bid to create a spot Bitcoin ETF, over the objections of the US Securities and Exchange Commission. The SEC has so far refused to allow ETFs that directly invest in Bitcoin, citing concerns about fraud and manipulation in the underlying market.
Eric Balchunas, a Bloomberg Intelligence ETF analyst, tweeted on Monday that the iShares Bitcoin Trust, with the ticker IBTC, "has been listed on the DTCC." Balchunas said on Tuesday that the listing appears to have been taken down.
Balchunas said he is not too surprised by the listing being taken down, and that he believes iShares was either told to do so or wants to wait until the ETF is closer to launch. BlackRock, the world's largest asset manager, owns the iShares business. The DTCC, or Depository Trust and Clearing Corporation, handles clearing and settlement in US markets.
Bitcoin also jumped 10% in a single day last week on ETF hype. However, the rally cooled off once it was revealed that a report of BlackRock winning approval to launch a Bitcoin ETF was incorrect.
Ether, the second-largest cryptocurrency, surged as much as 8.5% on Tuesday, briefly exceeding $1,800 in the wake of Bitcoin's rally. Smaller coins such as BNB, XRP, and meme-favorite Dogecoin also initially climbed sharply before moderating their gains.
Crypto traders who bet on Bitcoin's price falling lost $387 million in liquidations over the past 24 hours, according to Coinglass data. The SEC has already approved ETFs that invest in Bitcoin and Ether futures, but it has intensified its crackdown on crypto in general following last year's market crash.
Bloomberg Intelligence analysts Elliott Stein and James Seyffart say that spot Bitcoin ETF approval is inevitable, and that a batch of funds is likely to be approved, although the timing remains uncertain.
Bitcoin is still below its pandemic-era peak of almost $69,000 in 2021, squeezed by rising interest rates that reduce demand for risky assets. Its correlation with stocks, bonds, and gold has decreased lately, raising concerns that mainstream investors are losing interest.
Liquidity has improved slightly, said Justin d'Anethan, head of business development in Asia Pacific at crypto market maker Keyrock. Prices have recovered, and with them, some liquidity, but it is still nowhere near the levels of euphoria seen in 2020-2021.