Crypto enthusiasts were already thrilled when Bitcoin (BTC) surpassed $31,000 on Monday.
Then came the remarkable ascent. During the later hours of the day, Bitcoin notched up $32,000, followed swiftly by $33,000, then $34,000, and finally hit $35,000 within a matter of minutes. Perpetual contracts listed on Binance’s exchange nearly touched $36,000.
This impressive run brought Bitcoin back to levels last seen in May 2022. Prior to that, a series of unfortunate events involving Terra-Luna, Three Arrows Capital, Genesis, and FTX had cast a shadow over the industry, causing BTC to approach $15,000 and leading some to question the industry’s very survival.
However, the sentiment has markedly improved, largely fueled by the anticipation of Bitcoin ETFs on the horizon. These ETFs, proponents argue, will significantly simplify BTC investment, potentially broadening the pool of potential investors.
While Grayscale, the largest exchange-traded bitcoin product provider (owned by Digital Currency Group, like CoinDesk), currently operates a trust structure, the U.S. Securities and Exchange Commission initially rejected their attempt to transform it into a more appealing ETF. However, a recent court ruling in favor of Grayscale and the SEC’s lack of an appeal have increased the likelihood of Grayscale securing an ETF.
Furthermore, BlackRock, the world’s largest asset manager, has expressed strong optimism about Bitcoin’s prospects and has submitted its own Bitcoin ETF application to the SEC, as have other traditional financial firms. BlackRock’s CEO, Larry Fink, recently told Fox Business that they have been hearing from clients around the world about the demand for cryptocurrencies. Fink positioned crypto as another safe-haven asset for investors, akin to U.S. Treasuries or gold.
The appearance of the BlackRock ETF on the Depository Trust & Clearing Corp. website, a crucial U.S. market utility, is a positive sign, even though it doesn’t guarantee approval. The presence of the ETF on this platform suggests that BlackRock has made significant progress in preparing for its launch.
Around the time of Bitcoin’s rapid surge on late Monday, more than $167 million in derivative positions were liquidated, contributing to the daily total of $344 million in liquidations, according to CoinGlass. Open interest, which tracks the notional value of all derivative positions, couldn’t keep up with Bitcoin’s rise, dropping from a peak of $10.5 billion to $9.4 billion due to liquidations, stop-outs of short positions, and profit-taking by long positions.
In Galaxy Digital’s latest market report, a new narrative has emerged regarding the options market. It pointed out that at around $32,500, “options dealers will need to purchase almost $20 million of BTC for every 1% move up to stay delta neutral.”
