The price of Bitcoin soared to nearly $46,000 on Tuesday morning, representing a 7% gain on the day and the cryptocurrency’s highest level since April 2022. The latest uptick comes after Bitcoin had remained stuck in a band close to $43,000 for most of the prior two weeks following a series of gains in the last quarter that appear to signal a new bull market for the crypto industry after a disastrous 2022.
Bitcoin finished the year up 154%, making it one of the best performing assets of the year, while other cryptocurrencies such as Ethereum and Solana likewise posted big annual gains.
The recent surge in Bitcoin, which gave up some of its gains midday Tuesday to trade closer to $45,000, appears tied to widespread anticipation that the Securities and Exchange Commission will approve bids by BlackRock, Fidelity, and others to launch Bitcoin ETFs in the next two weeks.
The launch of Bitcoin ETFs is expected to attract new pools of capital into the crypto markets from institutions and other conservative investors who are restricted from buying Bitcoin directly, but may be willing to do so in the form of ETFs, which package assets in the form of shares traded on mainstream exchanges.
In addition to firms from the traditional financial sector, including Franklin Templeton, a number of pure crypto firms like Bitwise are vying to launch Bitcoin ETFs. The SEC had long refused to approve such applications, but the agency appears set to reverse course after a unanimous federal appeals court concluded its earlier refusals were unreasonable.
The recent price gains for Bitcoin have led some to speculate that the ETF approvals will prove to be a “buy the rumor, sell the news” event, and that the price will sag once the products are finally approved. Others have taken a more bullish case, predicting the price of Bitcoin has plenty of room to climb.
As with previous crypto bull markets, other cryptocurrencies—including so-called altcoins—have ridden Bitcoin’s coattails to achieve gains of their own. The biggest gainer has been Solana, a rival smart contract platform to Ethereum that had been pummeled for its association with the fraudster Sam Bankman-Fried but has since won back confidence from the market. Solana began 2023 around $16 and is now trading near $108, making it the fifth-biggest cryptocurrency.
