Bitcoin, the largest cryptocurrency in the world, soared to a more than one-year high on Friday, propelled by a series of positive developments that sparked renewed investor interest.
The cryptocurrency’s gains were aided by BlackRock, the world’s leading asset manager, unveiling its intention to launch an exchange-traded fund (ETF) dedicated to Bitcoin, despite the intensified regulatory scrutiny surrounding the digital asset sector in the United States.
BlackRock’s filing last week for the iShares Bitcoin Trust, an ETF that will enlist Coinbase Custody as its custodian and offer institutional investors exposure to the cryptocurrency, breathed new life into the market.
Notably, this move was accompanied by an announcement from EDX Markets, a crypto exchange supported by investment powerhouses Charles Schwab, Fidelity, and Citadel Securities, stating that it would facilitate trading in select cryptocurrencies.
These developments mark a turning point for cryptocurrencies, which have struggled amidst the aftermath of several industry meltdowns, including the sudden collapse of the FTX exchange in late 2022.
The regulatory landscape has further exacerbated negative sentiment, with the U.S. Securities and Exchange Commission’s recent lawsuits against crypto giants Coinbase Global and Binance, accusing them of rule violations—allegations that both companies vehemently deny.
Since BlackRock’s filing, Bitcoin has surged by nearly 25% in value, reaching a high of $31,458 on Friday, the highest level recorded since June 7, 2022. At present, Bitcoin stands at $30,872, reflecting a 3.29% increase.
Kate Laurence, general partner of Bloccelerate VC, a crypto project investment firm, said, “The dark clouds overshadowing crypto have lifted in recent days amid a burst of institutional interest. The likes of BlackRock, Charles Schwab, Fidelity, and Citadel throwing their hats into the crypto ring is hugely significant because it shows that institutions are very serious about the space—despite the recent regulatory crackdown.”
The surge in institutional interest indicates a reversal of fortunes for cryptocurrencies. Investors had initially flocked to the market during a period of low interest rates, propelling its value to a peak of $3 trillion in 2021. However, caution prevailed as rates rose, causing the market’s current value to stand at approximately $1.24 trillion, according to CoinGecko data.
Ethereum, the world’s second-largest cryptocurrency, has also experienced a notable uptick, rising by over 16% since last week. On Friday, it stood at 1,903.20, marking a 1.63% increase.
According to Doug Schwenk, CEO of Digital Asset Research, “The SEC lawsuit has created opportunities for robust, regulated players, so I’m cautiously optimistic that this BlackRock event will have some sustainability.”
