Overview of Crypto Market Movement
On Tuesday, shares of companies related to the crypto industry experienced a surge in value as Bitcoin’s price surpassed $45,000, reaching its highest point since April 2021. This increase was accompanied by growing anticipation for the approval of a Bitcoin spot exchange-traded fund (ETF) in the United States.
SEC’s Deadline and Investor Sentiment
Investors are becoming increasingly optimistic that the Securities and Exchange Commission (SEC) will greenlight at least one of the numerous spot Bitcoin ETF applications currently under review. The SEC is facing a critical deadline of Jan. 10 to make a decision on applications such as Ark Invest’s ARK 21Shares Bitcoin ETF.
Expectations and Industry Players
Market analysts anticipate that the SEC may approve multiple ETFs simultaneously to prevent any single provider from gaining an unfair advantage. Major financial institutions like BlackRock, Fidelity, and Invesco are among the asset managers awaiting potential approval of their ETF applications.
Regulatory Hurdles and Market Dynamics
Regulators have historically expressed concerns about ETFs backed by Bitcoin due to the cryptocurrency’s vulnerability to fraud and market manipulation. However, the likelihood of approval rose following a court ruling last year that required the SEC to provide more substantial grounds for rejecting Grayscale’s Bitcoin trust-to-ETF conversion application.
Impact on Company Stocks
Stocks of crypto-related companies reacted to the market developments, with Marathon Digital Holdings Inc. (MARA) seeing a more than 2% increase in value initially, followed by a decline later in the day. Riot Platforms (RIOT) experienced a gain of over 3%, while MicroStrategy (MSTR), a significant Bitcoin holder, surged by more than 11% before a slight pullback.
Conversely, shares of Coinbase (COIN), the leading U.S.-based crypto exchange and a favored custodian for potential ETF providers, dipped by over 8% by Tuesday afternoon. Nonetheless, the stock has delivered remarkable returns of nearly 400% over the past year.
