Bitcoin and ETH Hit New Milestones Amidst ETF Hopes
Bitcoin's surge, propelled by rising open interest and the promise of a spot Bitcoin ETF, contrasts concerns over declining trading volumes. Ethereum surpasses $2k with BlackRock's plans for an ETH spot ETF.
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Bitcoin is back to $37k, according to CoinGecko data, marking the third time in two days that the asset will be testing a new resistance level.
The flagship asset reached its highest price level since May 2022 on November 9, when it peaked at $37,883. But it could not sustain the price level, dropping as low as $36,335 before slowly rebounding. With its recent climb, BTC is up 2.2% in the last 24 hours.
However, the short-term drop is unlikely to bother investors as recent price movements suggest increased bullishness. After spending the early days of November in the $35k range, BTC now looks more likely to reach $38k. With its recent performance, BTC is up 7% in the last seven days and gained 36.7% in 30 days. Its YTD performance has now more than doubled at 120.86%.
What Is Driving Bitcoin's Recent Rally
The asset's open interest volume is the primary factor driving the recent surge in BTC price. Coinglass data shows the total open interest in Bitcoin futures is $16.7 billion. This open interest in Bitcoin futures is a sign of investors' bullishness. It is driven mainly by the possibility of spot Bitcoin ETF approval as early as January 2024, according to Matrixport.
Meanwhile, some experts are concerned about the need for robust trading volume to support the upward movement in price. The trading volume is down 24% in the last 24 hours, currently at $26.7 billion.
ETH Crosses 2k As BlackRock Files ETF
Bitcoin isn't the only digital asset enjoying a boost in price. Ethereum is also up 2.6% in the last 24 hours as it finally crossed $2k for the first time since April 2023. ETH has been enjoying an uptick in price since October. But the recent rise is primarily because of the news that BlackRock wants to list an ETH spot ETF.
A Nasdaq filing revealed that Coinbase would be the custodian for the ETH while a third party would hold the cash. With BlackRock seeking to list both spot Bitcoin and Ethereum ETFs, the asset manager is showing its commitment deepening to cryptocurrencies. Many believe that such institutional interest is good for the industry.
However, some are concerned that institutional interest in cryptocurrencies could affect its original ethos of decentralization. Former CEO of BitMEX Arthur Hayes noted that approving spot Bitcoin ETF could lead to centralizing the digital asset. He said that such centralization could undermine Bitcoin core value, and the institutions might try to align it with state interests.
