ETF news drives up the price of Bitcoin

Between yesterday and today there was a real boom in the price of Bitcoin, thanks mainly to the latest news regarding ETFs. 

To be fair, this is not the only dynamic going on, but it was probably the event that triggered the pump. 

The news about ETFs and the price of Bitcoin

Yesterday, in particular, two important pieces of news came out about ETFs, and in particular about the one from BlackRock. 

BlackRock is the world’s largest asset manager, and it has an ETF approval rate of more than 99%. 

When it officially filed an application with the SEC in July to have an ETF on spot Bitcoin admitted, the price of BTC had risen making new highs around the $31,800 mark. 

Later, in the face of Grayscale’s successful lawsuit against the SEC, it had become clear that the US agency no longer had any excuse for being able to continue to refuse to approve this type of ETF, and so the crypto markets began to react. 

Yesterday, however, there were two pieces of news that hint at an imminent launch of BlackRock’s ETF, after the company submitted an updated application with the SEC’s own comments. 

The first is that the company has begun the ETF’s seed, or preliminary fundraising in order to begin purchasing collateral. 

Note that the collateral is Bitcoin, so it is assumed that BlackRock has finally started buying BTC in order to use them as collateral for the ETF launch. 

The second is that BlackRock’s ETF, iShares Bitcoin Trust, has been listed on the Depository Trust & Clearing Corporation (DTCC).

The role of Chinese markets

Last night, after the publication of these two pieces of news, the price of Bitcoin had managed to rise above $32,000. 

Although for a brief moment, on the momentum of the rise, it had also managed to touch $35,000, it had later fallen back to $32,500, but only until the Chinese exchanges opened. 

In fact, for a few days now, Bitcoin price increases have been occurring when the traditional US and European financial markets are closed, while Asian markets are already open. 

Actually tonight the Chinese markets had opened down, but about half an hour after the opening a rebound occurred with a small but quick spike. 

Just at the same time as that spike, Bitcoin’s price made a second jump, moving back above $35,000. It later fell to $34,000. 

Yesterday, on the other hand, Bitcoin’s price had risen from $28,000 to $30,000 while the U.S. and European exchanges closed, and Chinese exchanges were down. It is possible that China’s central bank is continuing to intervene in financial markets by injecting liquidity, some of which ends up going to Bitcoin. 

The role of the dollar

Note that tonight, however, a third event occurred that may have played a role. 

Shortly after the US stock markets opened, the Dollar Index began a sharp descent below 106 points. 

That descent had lasted the entire time the US exchanges were open, until it reached 105.5 points. 

During that descent the price of Bitcoin had risen from $30,400 to $31,400. 

It had later risen again thanks to news about BlackRock ETFs, but the spike that took it above $35,000 at the same time as the spike on Chinese exchanges occurred as the Dollar Index again fell from 105.5 to 105.4 points. 

The sum of the factors: news on ETFs pushes Bitcoin price up

So the last few days’ boom in Bitcoin’s price started last night thanks to the Chinese market, then continued again yesterday at the opening of the US exchanges thanks to the drop in the dollar, and intensified with the US exchanges closed thanks to the news on ETFs. 

Later tonight it spiked again at the same time as a further drop in the dollar and a spike on the Chinese exchanges. 

As many as three factors are therefore driving the price of Bitcoin in recent days. 

The main one seems to be the one related to the ETF news, since it is the one that has produced the most noticeable increase.

However, the impact of the Chinese markets should not be underestimated because among the three ongoing factors it is the one that has been going on for the most days. 

Last but not least is the slight decline in the dollar, which suggests a return of interest in risk-on assets. 

Suffice it to say that just ten days ago the price was still below $27,000, and it has since risen a significant +27%. 

This increase occurred in three phases: the first, between Sunday 15 October, and Monday 16 October, with the return above $28,000; the second, last Friday, with the return above $30,000; and the third yesterday. 

The values recorded tonight are the highs of 2023.