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Bitcoin Rebounds on ETF Speculation: Grayscale Reshuffle and SEC Deadline Impact

Bitcoin made a recovery amid growing speculation that the US securities regulator might soon approve an exchange-traded fund focused on the primary token. It surged by up to 2.1%, hovering around $43,000 in London by midday, bouncing back from the previous day’s decline. Other major cryptocurrencies also saw gains, with Bitcoin Cash surging up to 14% after investors flocked to an investment vehicle linked to the token.

Grayscale Investments announced Barry Silbert’s resignation as chairman, preceding a January 10 deadline for the US Securities and Exchange Commission (SEC) to decide on a spot Bitcoin ETF. Grayscale seeks approval to transform its Bitcoin trust, the world’s largest, into an ETF. Hayden Hughes from Alpha Impact mentioned Silbert’s resignation as a positive signal for Bitcoin demand. Expectations arise that the SEC might greenlight other Grayscale products as ETFs, spurring institutional demand in Grayscale Bitcoin Cash Trust.

The Grayscale Bitcoin Cash Trust saw an 18% surge in trading volume on Tuesday, surpassing its average volume by seven times. Grayscale hasn’t immediately responded to requests for comment. There’s a speculation whether the SEC’s potential approval will trigger profit-taking, following the idea of “buy the rumor, sell the news.” The certainty of interest in spot Bitcoin ETFs planned by entities like BlackRock Inc. and Fidelity Investments remains uncertain.

Nic Carter from Castle Island Management LLC expressed confidence on Bloomberg Television that the SEC would likely approve spot Bitcoin ETFs before January 10. He foresees an expanded base of crypto investors in the mid-term but anticipates a possible sell-off due to the news in the short term.

Bitcoin’s surge this year has been propelled by expectations of falling US interest rates. The rally has somewhat recovered from the significant crash in 2022 that shook the crypto industry, but Bitcoin still trails its pandemic-era peak in 2021 of nearly $69,000.

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Disclaimer: Not Investment Advice

it’s crucial to understand that the information provided here is not to be construed as investment advice. The crypto market is dynamic and highly speculative, and decisions should be made based on thorough personal research and consideration of individual risk tolerance. Always consult with financial professionals and conduct your own due diligence before making any investment decisions. The intention of this exploration is to present insights and trends, not to provide specific investment recommendations.

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