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Bitcoin bulls have ignored widespread legal action against some of the cryptocurrency industry’s biggest players, higher interest rates and global recession concerns have sent the digital currency’s value near 20-month highs this week.
The digital coin traded at around $41,700 on Tuesday morning, surpassing $42,000 a day earlier. It has surged nearly 150 percent this year, outperforming the Nasdaq Composite Index, as investors believe regulators will soon approve the first spot exchange-traded fund that tracks the price of bitcoin. Is designed to.
Investment management experts are on the rise. Thirteen companies, including BlackRock, Fidelity and Swiss-based Pando Asset, have filed paperwork with the Securities and Exchange Commission to create such an ETF.
An ETF is essentially a bundle of assets divided into shares that investors can buy and sell on stock exchanges. Unlike existing Bitcoin ETFs, which are tied to futures contracts, a so-called spot fund would let investors own the token, without the hassle of crypto wallet-like requirements. Regulatory approval for such a product would realize the industry’s long-held dream of a mainstream investment product.
Despite the flurry of fund filings, the SEC has remained quiet about when such approval might come. Still, investors have been increasing their bets on Bitcoin in recent weeks, amid speculation that the agency will make its decision by January.
It is worth remembering that trading in crypto is exceptionally volatile, given the relatively small market for digital currencies. According to crypto investment services firm Matrixport, breathless anticipation for spot ETFs has created the conditions for a rally based on FOMO – that is, fear of missing out.
