by Bitcoin.
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the price Bitcoin It broke above $35,000 for the first time since May 2022, bolstered by the bitcoin exchange-traded fund and positive sentiment, which led to an increase in short liquidations.
Bitcoin rose more than 9% to $34,349.55 on Tuesday, according to Coin Metrics. By late Monday night, it had risen to $35,113.29, its highest level since May 8, 2022. The rally brings Bitcoin up nearly 110% since the start of the year and from its 2022 low.
The rally may have been fueled in part by investors betting against the crypto asset trying to cover short positions, in other words, by shorting. Bitcoin saw a short liquidation of $275.45 million on Sunday, followed by another $100.44 million on Monday, according to crypto data provider CoinGlass.
“The True Catalyst That Created the ‘God Candle'” [Monday] And as Bitcoin rose above $34,000, there was $167 million in short liquidations, mostly in offshore exchanges,” Bitwise Asset Management analyst Ryan Rasmussen told CNBC. Those investors who shorted Bitcoin in the $33,000-plus range will certainly feel the pain of this surprise.
Last week, the SEC declined to appeal a court ruling in Grayscale's lawsuit against it during a key deadline, raising hopes that a bitcoin-linked ETF could be approved in the next few months. Firms running bitcoin ETFs have updated their filings, and major investors like Ark's Cathie Wood and Galaxy's Mike Novogratz have emphasized that the SEC's tone has changed and it is now positively engaging with the industry.
A Bitcoin ETF will allow investors to gain exposure to Bitcoin price movements without directly owning the cryptocurrency. Bitcoin is considered a highly volatile asset and its price fluctuations are unpredictable.
Large financial institutions such as BlackrockInvesco, Fidelity and gray color They have been pushing Bitcoin ETFs and filing applications to sell such assets, portraying them as safer investment options than direct crypto investments, which are notorious for their speculative nature and price volatility.
Coinbase told CNBC that it is confident that a US bitcoin exchange-traded fund will be approved by the US SEC.
Investors are watching closely
The crypto industry is watching closely for developments that could indicate a comeback.
Over the past year, the sector has been plagued by scandals and high drama, such as the bankruptcy of FTX and Terraform and its CEO Do Kwon were indicted in February for defrauding investors.
The price of Bitcoin reached an all-time high in November 2021, with a value of over $65,000 at the time. However, a year later, last November, the value had dropped to around $16,000. That was when Sam Bankman-Fried's crypto exchange FTX collapsed and filed for bankruptcy.
SEC cracks down on crypto firms Companies such as Coinbase and Ripple have been involved in lawsuits with the SEC, which accuses them of violating securities laws.
Coinbase and Ripple, along with other crypto firms, have criticized the US for a lack of clarity on crypto regulations and threatened to leave the country in response to the SEC crackdown.
– CNBC's Ryan Brown contributed to this story.
