Bitcoin surged to its highest level in a week, less than 24 hours after fund management giant BlackRock filed paperwork for a spot bitcoin exchange-traded fund (ETF). The largest cryptocurrency by market capitalization was recently trading at $26,369, up nearly 5% over the past 24 hours, according to market data.
The timing of BlackRock’s filing can be seen as an effort to undo this pairing, by reiterating their commitment to Coinbase and a regulated spot bitcoin trust in the same action, said Mark Connors, head of research at Canadian crypto asset manager 3iQ.
The surge in bitcoin was accompanied by a 4.5% increase in ether, the second largest crypto in market value, which had lost the $1,700 threshold for the first time since mid-March earlier this week. Other major cryptocurrencies, including those that tumbled following their mention in U.S. Securities and Exchange Commission (SEC) lawsuits against exchanges Binance and Coinbase last week, regained large swathes of ground.
The CoinDesk Market Index, a measure of the cryptocurrency market’s performance, increased 4.4%, although CoinDesk’s Bitcoin and Ether Trend Indicators remained in downturn territory, reflecting lingering investor worries about an industry being buffeted by increasing U.S. regulatory scrutiny, as well as inflation and monetary policy concerns.
The main equity indexes were trading sideways after seesawing earlier in the day with the tech-focused Nasdaq Composite up slightly but the S&P 500, which has a hefty technology component, down a smidgen. Stocks have surged six consecutive days with the Nasdaq, S&P 500 and Dow Jones Industrial Average (DJIA) all recently hitting 2023 highs. Gold and U.S. Treasury yields both ticked up.
In a speech Friday, Federal Reserve Governor Christopher Waller indicated that the central bank remained concerned about inflation, even as it has weathered criticism that its hawkishness precipitated a March crisis in the banking sector. Earlier this week, the Fed halted a 14-month diet of rate hikes that have often weighed heavily on crypto and other asset markets.
The surge in bitcoin following BlackRock’s filing for a spot bitcoin ETF suggests that the move may have been seen as a sign of implicit support for the industry, as it confronts the SEC’s legal actions.