The price of bitcoin has continued to fluctuate in recent weeks, reflecting uncertainty over the regulation of bitcoin-ETFs in the US.
After briefly breaking the $42,000 mark on Friday, bitcoin is starting the new week in great shape. The queen of cryptocurrencies fell below $41,000 on Monday, but was just above that threshold at 9:30 a.m. Tuesday.
Bitcoin fell "along with stocks on Wall Street, marking a reversal of the conditions that have prevailed over the past month," notes The Block. When Wall Street opened Monday, the Dow index was down 0.1 percent, the S&P 500 was down 0.3 percent, and the Nasdaq was down 0.3 percent.
But it's not just U.S. markets that are impacting the price of the queen of cryptocurrencies. One indicator has particularly excited the crypto community in recent weeks. Bitcoin has actually soared on hopes of bitcoin-spot ETF confirmation from some industry giants like Blackrock and Fidelity.
"If a U.S. bitcoin spot ETF is not approved anytime soon, we still think a short-term pullback is very likely," said Andre Dragosz, head of research at ETC Group.
Speculation about ETFs "continues to drive the movement of markets like bitcoin at the moment as rumors continue to circulate that large institutions continue to meet with regulators to potentially launch a new marketplace for cryptocurrency exchanges," notes Simon Peters, market analyst at eToro.
"As a result, bitcoin continues to 'plow through the space', weeks after a significant rise in its price," he adds.
As a reminder, an ETF (or Exchange Traded Fund) is an exchange traded index fund that tracks a stock market index (or one or more financial or physical assets, such as gold), replicating the rise and fall in the price of that index (or those assets). ETFs can be categorized into futures ETFs and spot ETFs.
Despite such a gloomy short-term trend, Andre Dragosz expects the bitcoin price to rise in 2024, provided three criteria are met: approval of a bitcoin ETF, a halving of the price in April 2024, or a US recession.