The digital currency Bitcoin took a step towards becoming an investment mainstream in the USA last week. But the upswing for the cryptocurrency after this news has now leveled off again.
After the euphoria, disillusionment seems to be spreading across the crypto market. While Bitcoin had risen to around $49,000 a week ago after special stock exchange funds were first approved, it is currently trading significantly lower. On Friday morning, the oldest and best-known digital system cost around $41,100.
“After the first approval of a Bitcoin spot ETF in the USA, there is a hangover mood in the market,” commented crypto expert Timo Emden from Emden Research. Investors are obviously undergoing a fact check with a sober perspective. The latest price development shows that ETF approval should not be seen as a “free pass for further price increases”.
The US Securities and Exchange Commission (SEC) had approved eleven so-called spot ETFs on Bitcoin, including funds from large asset managers such as Blackrock and Fidelity. There was great joy among Bitcoin fans; the approval is considered a milestone for the industry. With the exchange-traded ETFs, US investors can for the first time invest directly in Bitcoin without having to buy the digital currency themselves.
Experts hope that the innovation will give Bitcoin a better reputation, from which other digital assets such as Ether could also benefit. There is also the hope that the new ETFs will attract fresh money and give crypto prices a boost. Despite strong price gains last year, Bitcoin is far from its record high from 2021. At that time it rose to almost $69,000.
The US bank JPMorgan is more cautious: its experts expect shifts within the crypto sector rather than an influx of new money. The latter depends less on new forms of investment and more on the scope that regulatory authorities grant so that Bitcoin and other cryptocurrencies can establish themselves in the financial system.
Source: Stern
