Bitcoin Rebounds To $28,000 As SEC Signals Spot ETF Optimism

Bitcoin (BTC), the world's largest cryptocurrency by market capitalization, rebounded to a price level of over $28,000 Thursday as the U.S. Securities and Exchange Commission (SEC) began displaying positive signs regarding its stance on applications for spot Bitcoin exchange-traded funds (ETFs).

The world's original cryptocurrency experienced a resurgence on Oct. 15, trading at the $28,000 price point and undoing the losses from the previous week's price drop.

Notably, Bitcoin showcased its strength over other cryptocurrencies, or altcoins, by increasing its dominance by 0.5% for the third consecutive week.

Bitcoin's dominance now stands at 51.4%, up from the previous week's 50.9%, which measures the relationship between Bitcoin's market capitalization and the total market capitalization of all digital assets.

"Bitcoin's positive price trend followed the news that the SEC chose not to appeal the Grayscale case, based on the court's judgment of August 29th. The court deemed the SEC's rejection of Grayscale's proposal "arbitrary and capricious" due to a lack of explanation regarding the impact of Grayscale's Bitcoin ownership versus Bitcoin futures on the CME's ability to detect fraud," Matteo Greco, a Research Analyst at the publicly-listed digital asset and fintech investment firm Fineqia International, told International Business Times.

"The SEC had 45 days to appeal the ruling, with the deadline set for October 13th. Upon learning of the SEC's decision not to appeal, BTC's price displayed strong upward movement, recovering from the previous week's dip," the research analyst added.

"This news was well-received by investors, notably reflected in the narrowing discount of the Grayscale Bitcoin Trust (GBTC), which currently sits at 15.9%. This is the lowest level recorded since December 2021. The discount narrowing trend commenced in mid-June 2023 when BlackRock filed for its Bitcoin Spot ETF. Back then, the GBTC discount was approximately 43%," Greco further told IBT.

He also explained that the reduction in the GBTC discount over the previous months is a positive indicator of increasing interest and confidence among investors in the approval of a spot Bitcoin ETF by the SEC.

"The GBTC discount mirrors investor expectations regarding the potential conversion of the Bitcoin Trust into a Bitcoin Spot ETF. The significant reduction in the discount over the past few months, following Grayscale's favorable outcomes against the SEC in court, reflects growing investor confidence in the possibility of Spot ETF approval in the future. Notably, the first final deadline for BTC Spot ETF approval or denial is set for January 10, 2024, concerning the ARK 21Shares filing. Several other filings, including BlackRock's, have their next deadlines scheduled for mid-January, with the latest potential deadline set for mid-March," Greco said.

The growing confidence in the SEC's approval of spot Bitcoin ETFs was further bolstered by a recent statement from American investor Cathie Wood, the CEO and CIO of ARK Invest.

Wood mentioned that the spot BTC ETF application by ARK Invest and 21Shares is making progress and highlighted a change in the SEC's approach to BTC ETF applications.

"Our partner 21Shares in Europe did answer or send information in response to the SEC questions... and what we see here is a little bit of a change in the SEC's behavior," Wood said in a recent CNBC interview, adding, "They actually are asking questions and we provided five pages along with our partner of answers to those questions. So progress we would say."

Furthermore, Wood expressed optimism that the U.S. financial regulator will eventually approve spot Bitcoin ETF applications and anticipates that multiple approvals will occur simultaneously. She stated, "The SEC is engaging with us for the #BitcoinETF application. It indicates a change in the SEC's behavior. Bitcoin ETFs will definitely be approved, and multiple ETFs will receive approval simultaneously. The court will mandate the SEC."

As of 10:33 a.m. ET on Thursday, Bitcoin was trading at $28,518.97, with a 24-hour trading volume down by 14.36% at $11.59 billion. This represents a 0.82% increase in the last 24 hours and a 6.7% gain over the past seven days.

Bitcoin's total circulating supply stands at 19.52 million BTCs, with its value up by 0.90% to a $556.82 billion market cap, according to data from CoinMarketCap.