Bitcoin bulls have ignored a sweeping legal crackdown on some of the cryptocurrency industry’s biggest players, high interest rates and global recession concerns, pushing the digital currency’s value near a 20-month high this week.
The digital currency was trading at around $41,700 on Tuesday morning, after surpassing $42,000 the day before. It has gained about 150% this year, far outpacing the Nasdaq composite index, as investors bet regulators will soon approve the first exchange-traded fund designed to track the price of Bitcoin.
Investment management specialists are teeming. Thirteen companiesincluding BlackRock, Fidelity and Switzerland-based Pando Asset, have filed paperwork with the Securities and Exchange Commission to create such an ETF
An ETF is essentially a collection of assets divided into shares that investors can buy and sell on an exchange. Unlike existing Bitcoin ETFs, which are linked to futures contracts, a so-called spot fund would allow investors to own the token itself, without the hassle of requirements like a crypto wallet. Regulatory approval for such a product would usher in the industry’s long-standing dream of a mainstream investment product.
The SEC has remained silent on when such approval might come, despite the flurry of requests for funds. However, investors have increased their bets on Bitcoin in recent weeks, amid speculation that the agency will succeed decision by January.
It is worth mentioning that cryptocurrency trading is exceptionally volatile, given the relatively small market for digital currencies. The breathless wait for a spot ETF has created the conditions for a FOMO-based rally – or the fear of missing out – according to cryptocurrency investment services company Matrixport.