Bitcoin
was up slightly in the face of macroeconomic headwinds Wednesday, outperforming other risk-sensitive assets on hopes that regulators will approve spot Bitcoin exchange-traded funds.
The price of Bitcoin has risen less than 1% over the past 24 hours to above $28,550. The largest digital asset remains at the highest consistent levels since mid-August following a rally that began last Friday, with optimism stemming from hopes that the first spot Bitcoin exchange-traded fund (ETF) could soon begin trading. Bitcoin even spiked above $30,000 on Monday following a false report that the first such ETF had been approved, underscoring how this key catalyst—which has loomed for months—could reinject volatility to crypto markets that otherwise have stagnated.
“Current positions near $28,500 indicate bullish dominance and confirm the existence of an upward channel since early September with a sequence of more than three higher highs and lows,” said Alex Kuptsikevich, an analyst at broker FxPro. “The market could quickly move to the $29,400 level, recovering from the mid-August selloff.”
Bitcoin bulls hope that spot ETFs—which hold Bitcoin themself, as opposed to futures contracts tracking the crypto held by existing ETFs—will usher in a fresh wave of investor interest in cryptos and herald institutional adoption of digital assets. The prospect that either the
Grayscale Bitcoin Trust
will be allowed to convert to an ETF, or that the Securities and Exchange Commission will approve spot Bitcoin ETFs from
BlackRock
and other traditional financial firms, was dominating sentiment.
With the ETF frenzy at the fore, Bitcoin has outperformed other risk-sensitive assets, namely stocks, as the
Dow Jones Industrial Average
and
S&P 500
have lagged.
Stocks sold off on Tuesday and remained under pressure on Wednesday amid both signs that the U.S. economy continues to run hot and fears that escalating conflict in the Middle East may send oil prices higher, stoking inflationary forces. Both factors could ultimately push the Federal Reserve to keep interest rates higher for longer than once expected, with higher borrowing costs a key headwind for the riskiest assets.
Beyond Bitcoin,
Ether
—the second-largest crypto—fell less than 1% to $1,580. Smaller tokens or altcoins were weaker, with
Cardano
and
Polygon
down 2% each. It was more of the same for memecoins, with
Dogecoin
and
Shiba Inu
both falling 2%.
“The picture in the altcoins is less optimistic. Ethereum has been making lower and lower local highs and lows for the past two weeks after coming under increased pressure following a consolidation below the 200-week average, with the 50-week average acting as local resistance,” said Kuptsikevich.
Write to Jack Denton at [email protected]
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