Bitcoin (BTC) and the broader crypto market held on to their recent gains on Tuesday, with Bitcoin appearing to hold support above the $31,000 level.
As of Tuesday at press time, BTC traded just north of $31,000, up 1.2% for the past 24 hours, while Ethereum’s native ETH token was more or less unchanged over the same period, trading at $1,960.
Most other major coins were also little changed for the past 24 hours, holding on to their gains from late June.
On a 7-day basis, the best performer among the top 100 cryptoassets by market capitalization was decentralized finance (DeFi) protocol Compound’s COMP token, which rose close to 58%.
The token was followed by MakerDAO’s governance token MKR, which gained 49% over the same time period.
Confusion around BlackRock’s ETF filing
The strong performance by major cryptoassets in recent days has come despite concerns and speculation surrounding asset management giant BlackRock’s filing for a spot Bitcoin exchange-traded fund (ETF).
Initially, the concerns were focused on a Wall Street Journal article that claimed staffers at the Securities and Exchange Commission (SEC) had said the filings were not “clear and comprehensive” enough.
Then, the various ETF issuers that had applied to list a spot Bitcoin ETF, including Fidelity, WisdomTree, VanEck and Invesco, all re-submitted their applications with updated information about the crypto exchange they would work with, as requested by the SEC.
All of the ETF providers named Coinbase as the exchange they would work with.
What concerned the market later was why BlackRock re-submitted its filing so much later than all the other applicants, leading some to speculate that the firm had lost interest in a Bitcoin ETF.
However, things turned out not to be as bad as some had assumed, with information later surfacing that BlackRock had indeed re-filed on June 29 but Nasdaq had not updated its website to reflect that.
“They just added Coinbase like everyone else,” Bloomberg’s Balchunas pointed out was the only thing that stood out about the re-filing.
Bitcoin and other cryptocurrencies have been rallying in recent days, despite concerns about BlackRock’s decision to withdraw its application for a spot Bitcoin ETF. The ETF would have allowed investors to buy and sell Bitcoin directly on the stock market, but BlackRock withdrew its application after the Securities and Exchange Commission (SEC) raised concerns about the potential for market manipulation.
Despite the setback, Bitcoin and other cryptocurrencies have continued to climb. Bitcoin is currently trading around $31,000, up 20% from its lows in June. Ethereum is up 30%, and other altcoins have also seen significant gains.
There are a few reasons why cryptocurrencies may be rallying despite the BlackRock ETF news. First, some investors may see the withdrawal as a sign that the SEC is not as hostile to cryptocurrencies as they had feared. Second, the overall financial markets have been rallying in recent days, and cryptocurrencies are benefiting from that trend. Third, some investors may be buying cryptocurrencies in anticipation of future ETF approvals.
It is too early to say whether the current rally will continue. However, the fact that Bitcoin and other cryptocurrencies have been able to hold their ground despite the BlackRock ETF news is a positive sign for the long-term prospects of the industry.
Here are some of the factors that could be contributing to the recent crypto rally:
- Institutional interest in crypto is growing. A number of large financial institutions have recently announced plans to invest in or provide services for cryptocurrencies. This is likely to drive demand for crypto assets and support prices.
- The global economy is recovering from the COVID-19 pandemic. This is leading to increased risk appetite among investors, which is also benefiting crypto markets.
- Technical factors. The crypto market has been consolidating in recent months, which could be setting the stage for a breakout.
Of course, there are also some risks to the crypto market. These include:
- Regulatory uncertainty. Governments around the world are still trying to figure out how to regulate cryptocurrencies. This uncertainty could weigh on prices.
- Volatility. Crypto markets are notoriously volatile, which means that prices can swing wildly in either direction. This can make it difficult for investors to profit from the market.
Overall, the recent crypto rally is a positive sign for the industry. However, there are still some risks that investors need to be aware of.