The price of ether experienced a significant boost, surpassing the key $2,000 level for the first time in months, driven by BlackRock’s preliminary moves in filing for an ether exchange-traded fund (ETF). Coin Metrics reported that ether saw an increase of nearly 8% and reached $2,047.10, while bitcoin also climbed to its highest level since May 2022, hitting $37,970. The rise in bitcoin price prompted a wave of short liquidation, leading to an upward momentum in crypto assets, according to Clara Medalie, head of research at Kaiko.
In another development, a filing for an iShares Ethereum Trust showed up on Delaware’s Division of Corporations website. This comes after a similar notice for the iShares Bitcoin Trust appeared just a week before BlackRock filed for a bitcoin ETF. BlackRock refrained from commenting on the matter.
The news of a potential ETF approval brought optimism to the market, providing a welcome respite from recent negative news impacting crypto markets. “[An ETF approval] could lead to another surge, or we might already be experiencing it,” said Medalie. It remains uncertain whether this rally will continue, but the outlook appears promising.
The price increase in bitcoin also had a positive effect on other crypto assets and equities. Solana, an outperformer this year, recorded an 11% gain, while the tokens tied to Cardano and Polygon rose 4% and 3% respectively. This trend is consistent with the historical correlation between bitcoin and other altcoins.
Additionally, FTT, the token associated with defunct exchange FTX, surged by 45% after SEC Chair Gary Gensler expressed the possibility of a revival if new leadership demonstrates a clear understanding of regulatory compliance. In the equities market, Coinbase shares rose by 11%, Microstrategy saw a gain of 9%, and bitcoin mining stocks Marathon Digital and Riot increased by 18% and 10% respectively. CleanSpark and Iris Energy also experienced gains of 10% and 4%.
Frequently Asked Questions (FAQ)
What is an ETF?
An ETF, or exchange-traded fund, is a type of investment fund that tracks the performance of a specific index, commodity, or asset class. It allows investors to gain exposure to a diversified portfolio of assets and trade them on stock exchanges.
Why are ETFs important in the crypto market?
ETFs are highly anticipated in the crypto market because they provide a regulated and accessible way for investors to gain exposure to cryptocurrencies. The approval of a crypto ETF would likely increase liquidity, attract institutional investors, and potentially lead to a surge in prices.
How does bitcoin’s price impact other cryptocurrencies?
Bitcoin’s price often has a significant influence on the broader cryptocurrency market. When bitcoin experiences a price increase, it tends to create a positive sentiment and momentum for other cryptocurrencies, often resulting in price rises for those assets as well. This correlation is due to bitcoin’s position as the most dominant and widely recognized cryptocurrency.