Bitcoin’s value surged to a two-week high of $28,103 on June 20, providing a glimmer of hope to bullish traders that the digital currency could finally snap its ten-week downturn. This bounce came in spite of recent headwinds caused by the SEC’s enforcement actions against Binance and Coinbase.
The recent rally is largely attributable to escalating institutional interest in Bitcoin, particularly from financial giants such as BlackRock and Fidelity Investments, both of which are reportedly gearing up to submit applications for Bitcoin ETFs.
The uptick in Bitcoin’s value kicked off after BlackRock, the world’s biggest asset manager with over $8.5 trillion in managed assets, announced on June 15 that it had filed an application with the SEC to establish a Bitcoin ETF in the US. Despite not being the first applicant, BlackRock’s sheer scale sets it apart from its predecessors.
Thus far, the SEC has consistently declined Bitcoin ETF proposals, with past hopefuls including Cathie Wood’s ARK, 21Shares (which has submitted three applications), and Grayscale. The latter challenged the SEC’s denial in an appeals court, contending the legitimacy of Bitcoin futures.
According to BlackRock’s SEC filing, the firm plans to enlist Coinbase for holding the Bitcoin associated with its ETF. This move has also indirectly propelled Grayscale’s ETF, which is inching towards 2023 highs with a discount of less than 37%.
A further boost to Bitcoin’s value is the receding U.S. Dollar Index (DXY). As a rule of thumb, when the DXY pulls back, investors typically show greater inclination towards riskier assets, Bitcoin included.
In conclusion, Bitcoin’s price hike today seems to be fuelled by multiple factors: institutional interest from behemoths like BlackRock, the positive impact on Grayscale’s ETF, and the ebbing DXY, creating a promising environment for the cryptocurrency to break its prolonged losing streak.
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