Bitcoin experienced a substantial price surge Monday, surpassing the $47,000 price point as the market placed substantial bets on the U.S. Securities and Exchange Commission (SEC) potentially approving several spot Bitcoin exchange-traded fund (ETF) proposals come Wednesday.
Kicking off the week with a significant surge, Bitcoin initially traded above the $46,000 price threshold and eventually soared past the $47,000 mark, marking an over 6% spike compared to its closing value on Sunday.
This price rally continues the upward trend observed during the initial week of the year, where the world's oldest crypto asset recorded a 3% spike in its price.
The surge in Bitcoin's price this week is largely attributed to the final submission of S-1 registration forms by Bitcoin exchange-traded fund (ETF) issuers looking to launch spot Bitcoin ETFs.
Additionally, the swift response from the Securities and Exchange Commission (SEC) regarding the recently filed documents, which came mere hours after submission, fueled optimism within the industry about the potential approval of such products in the U.S.
Matteo Greco, a Research Analyst at the publicly listed digital asset and fintech investment business Fineqia International, explained in an email to the International Business Times, "The market's tumultuous nature is predominantly attributed to the imminent SEC decision on the approval or rejection of BTC Spot ETFs. The SEC will communicate its decision to 21Shares by January 10, and likely notify most, if not all the 12 other issuer applicants on the same day of approval. This approach aims to prevent 21Shares from having a first-mover advantage over other issuers.''
The analyst also linked Bitcoin's increased volatility with the surge in trading volume on centralized cryptocurrency exchange platforms, a trend noticed continuing into the first week of 2024 and potentially influenced by the SEC's impending decision on spot Bitcoin ETF applications.
"Elevated volatility correlates with increased trading volume, as evidenced by the trading volumes on centralized exchanges. Cumulative volume on centralized exchanges reached approximately $1.1 trillion in December 2023, marking the highest level since May 2022. The trend of heightened volume persisted into the first week of 2024, with daily volumes reaching $42.7 billion to Jan. 7, the highest weekly level since March 2023," Greco said.
"The connection between elevated volumes and the impending decision on BTC Spot ETFs is apparent when examining the daily spot volume on centralized exchanges using a weekly moving average. In the period between January 1 and 7, 2024, BTC recorded $14.1 billion in daily volume, reflecting a 61% increase from the $8.75 billion recorded the previous week. In the same period, Ethereum (ETH)'s total daily volume amounted to $4.2 billion, marking a 3% decrease from the $4.4 billion recorded in the preceding week," he added.
The price rally of Bitcoin reflected its dominance, which is indicative of the crypto asset's market capitalization compared to the entire cryptocurrency market. This dominance witnessed a 5.8% increase from 51% recorded in the past week to 54% this week.
"BTC's share was 54% at the end of the week, a 5.8% increase from 51% registered the previous week. These data points indicate a shift of capital from altcoins to BTC, aligning with positive sentiment by market participants toward approval of BTC Spot ETFs," Greco said.
As of 1:03 p.m. ET on Tuesday, Bitcoin was trading at $46,835.46, exhibiting a 24-hour trading volume increase of 20.82% at $38,455,487,522.
The latest price action of Bitcoin showcases a 3.52% increase in its value for the day and a 3.60% gain over the last seven days.
According to data from CoinMarketCap, Bitcoin's current circulating supply stands at 19,593,881 BTC, with its market cap at $918,198,232,451.
