Bitcoin’s value recently soared past $45,000, fueled by growing speculation that the U.S. might soon approve several spot Bitcoin Exchange-Traded Funds (ETFs). This optimism has significantly impacted the cryptocurrency market, with Bitcoin trading at $45,035 at 8:00 a.m. ET.
This spike in Bitcoin’s value led to a dramatic liquidation of leveraged positions in the market. More than $8 million in Bitcoin positions were liquidated in just an hour, predominantly from short-sellers. The broader crypto market wasn’t left out, experiencing over $10 million in short position liquidations, contributing to a total of approximately $15 million across various exchanges, as per CoinGlass data.
Such liquidations in derivative markets typically occur when a trader’s position is automatically closed due to a lack of sufficient funds to cover losses. This happens when market movements go against the trader’s initial position, eroding their margin or collateral.
The cryptocurrency market cap hit $1.67 trillion, a 0.89% increase, driven by expectations that the U.S. Securities and Exchange Commission (SEC) might greenlight several spot Bitcoin ETFs. Major firms like BlackRock, Grayscale Investments, Valkyrie, ARK 21Shares, and Invesco have updated their filings for proposed spot Bitcoin ETFs. Crypto enthusiasts are hopeful that the approval of these ETFs could bring billions of dollars into the sector, allowing institutional traders to hold Bitcoin directly.
Venture capitalist Mark Carnegie, founder of MHC Digital Group, shared his bullish outlook on Bitcoin in a CNBC interview. Carnegie predicts Bitcoin might retest the $50,000 mark, citing a potential short-term uptrend over the next 30 to 90 days. He expressed concern about the U.S. equity markets and potential recession indicators, referring to the recent U.S. payroll data which surpassed expectations and maintained a steady unemployment rate.
Carnegie remained uncertain about how these economic factors would directly impact cryptocurrencies. However, he suggested that the inflow of investments from Asia and the U.S., particularly with the pending ETF approvals, could significantly influence the market. He expressed a current preference for Bitcoin over Ethereum given the financial landscape.
Meanwhile, discussions around BlackRock’s potential involvement in Bitcoin accumulation have intensified. James Seyffart, a Bloomberg ETF analyst and host of the Discover Crypto YouTube channel, discussed the speculation that BlackRock might seed $10 million into the Bitcoin ETF. Seyffart pointed out that BlackRock usually seeds between $5 million to $10 million in its ETF ventures, often followed by larger investments post-launch. He also noted that other players like Bitwise might consider seedings up to $200 million.
Seyffart addressed rumors about BlackRock making secretive Bitcoin purchases prior to SEC approval. While he acknowledged it as a possibility, he noted that institutions like BlackRock typically buy close to the ETF launch date. He also mentioned that BlackRock had applied for an Ethereum spot ETF and discussed the potential for ETFs in other cryptocurrencies like XRP, Solana (SOL), and Cardano. He concluded that, apart from Ethereum, it’s unlikely for any other crypto asset to get an ETF soon, unless there’s a significant shift in the regulatory landscape.