The price of bitcoin touched a 13-month high on Thursday as optimism grew among investors that the U.S. could soon get a bitcoin ETF.
Bitcoin was last higher by more than 2% and trading at $31,209.18, according to Coin Metrics. Earlier in the morning, it climbed to about $31,450, reaching its highest level since June 2022.
The move was in contrast to weaker stock prices and yields on the 10-year U.S. Treasury note above 4% on Thursday after better-than-expected employment reports. Additionally, the minutes of the Federal Reserve’s June meeting, released Wednesday, showed that most officials would support more rate increases ahead. Meanwhile, cryptocurrency liquidity has been low for several months, continuing to exaggerate both up and down moves.
“There is still a weight on the price,” said Noelle Acheson, economist and author of the “Crypto is Macro Now” newsletter. “We have often over the past few weeks seen selling resistance at around $31,000. That will eventually be broken, but meanwhile traditional markets seem to be entering a more risk-off mood – we can’t yet assume that bitcoin will just shrug that off.”
Sentiment among traders was high though, after BlackRock CEO Larry Fink gave bitcoin perhaps its biggest ever endorsement from a major institutional player. Speaking on Fox Business News Wednesday, Fink called Bitcoin “an international asset” and said it’s “not based on any one currency so it can represent an asset that people can play as an alternative.”
Bitcoin has steadily climbed since June 15, when BlackRock, the largest asset manager in the world, filed to launch a spot bitcoin ETF. The number of coins held by institutions through trusts, ETFs and funds has spiked since then, reaching its highest level in more than a year, according to CryptoQuant, and bitcoin open interest is back to pre-FTX levels.
“Market participants are reacting favorably to the entrance of legacy financial institutions into bitcoin — a trend that lends further validity to an asset that was once believed to be a passing fad,” said Michael Sonnenshein, CEO of Grayscale, whose bitcoin trust is awaiting the green light to convert into an ETF.
“More importantly, though, recent news of new entrants into bitcoin underscores the staying power of this asset class more broadly, and many investors view this as a once in a generation investment opportunity,” Sonnenshein added.