Bitcoin up ahead of potential spot ETF approval

by Jonathan Adams
Bitcoin price

Bitcoin (BTC-USD) has increased nearly 6% in the past week, now trading at $28,354

Bitcoin has seen a notable rise in the past week. The gain has been driven in some part by expectation over the potential approval of multiple spot bitcoin exchange-traded fund (ETF) filings.

Bitcoin (BTC-USD) has increased nearly 6% in the past week, now trading at $28,354, as per CoinGecko data.

This is a retrace from a brief rise to $30,000 that was reached on Monday, after a fake news stated that BlackRock’s proposed spot bitcoin ETF had gained approval. The report by Cointelegraph resulted in a jump in trading activity and volatility. While bitcoin retreated after the report was debunked, it has still advanced throughout the week, nearing $29,000 on Wednesday.

Analysts view the false alarm at the beginning of the week as a dress rehearsal for what would happen if a spot bitcoin exchange-traded fund were actually to be approved. In the past week, signals that the US Securities and Exchange Commission (SEC) will approve a spot bitcoin ETF have been rising.

In late August, a panel of judges at a US appeals court ruled that the Securities and Exchange Commission had made an error when refusing Grayscale Investments’ application to convert the Grayscale Bitcoin Trust (GBTC) into a spot bitcoin exchange-traded fund. The judges said the agency’s decision was “arbitrary and capricious.”

Last Friday, the US regulator chose not to challenge the court ruling, a decision that analysts say raises the chances for the Grayscale Bitcoin Trust to be converted into an ETF.

Since then communication between fund managers and the Securities and Exchange Commission regarding spot bitcoin ETFs has become more constructive, as per Bloomberg analysts James Seyffart and Eric Balchunas.

A recent update to the spot bitcoin exchange-traded fund prospectus from Ark and 21SHares adds at least five pages of new text, indicating a constructive discussion with the SEC, and a step that typically only occurs when a fund is on its way to being approved, Seyffart and Balchunas observed.

According to a Bloomberg report on Saturday, the analysts said that communication between Grayscale Investments and the SEC “is going to open up” after the regulator’s decision not to appeal the court ruling.

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