Bitcoin just had its best week in 18 months

This week, Bitcoin prices soared to 18-month highs north of $35,000 before cooling slightly — so what’s been getting markets so excited? One big reason is the growing anticipation over one or more of Wall Street’s many “spot” BTC exchange-traded fund (ETF) applications finally getting SEC approval in the near future. Over the last 30 days, the leading cryptocurrency by market capitalization has steadily ticked upward by 30%, prices for crypto-related stocks like mining companies have surged, and BTC futures markets show that at least some traders predict more good news to come. 

Here’s what you need to know about BTC’s latest surge.

Signs are pointing toward a potential near-term approval of a spot bitcoin ETF. 

In one potential sign that a spot ETF launch could be on the horizon, the ticker for BlackRock’s planned ETF — IBTC — was spotted on the website of clearinghouse Depository Trust & Clearing Corporation (DTCC) on Monday before being removed on Tuesday. (On Tuesday evening, a DTCC spokesperson told CoinDesk that the proposed ETF had actually been on their website since August.) Prices spiked when traders noticed the ticker’s addition before dropping around 3% after it was removed.

Another major indicator came in August, when a federal court mandated that the SEC reconsider its prior rejection of Grayscale’s spot BTC ETF application — leading some industry observers, including JP Morgan, to predict that the first ETF will be rolled out by mid-January. “I've been thinking we should approve one for the last five years,” crypto-forward SEC Commissioner Hester Peirce recently told CNBC. “The logic for why we haven’t has always mystified me.”

Spot BTC ETFs (which would hold BTC and sell shares to customers via conventional brokerages) are seen as a potentially powerful way to increase mainstream adoption of crypto. BlackRock, Ark Invest, and Fidelity are among the finance giants that have applied to manage a spot ETF.

As BTC rises, crypto investors’ sentiment is becoming more bullish.

For most of the year, a prolonged crypto winter has seen U.S. crypto trading volumes sink to levels not seen since before the 2021 bull run. But with BTC ticking over the $35,000 mark — and notching it’s best week since early 2022 — many analysts see a shift in sentiment. In the past five years, bitcoin has risen by an average of 10% in the month following a 10% weekly gain, according to Bloomberg. 

Bitcoin’s next halving may also be fueling gains.

Bitcoin’s rally may also be fueled by anticipation over the cryptocurrency’s next “halving,” in April. Bitcoin’s halvings are a key element of its code — designed to make BTC a scarce, inflation-resistant resource — that reduces the amount of bitcoin awarded to miners by half every four years until all 21 million bitcoin have been virtually mined (probably around the year 2140). Historically, bitcoin has set all-time highs in the 12 to 18 months following a halving cycle, and a recent report from Morgan Stanley said that the upcoming halving cycle could spell the end of this current crypto winter.

Bitcoin mining stocks are outpacing bitcoin’s gains. 

The top 11 publicly traded bitcoin mining companies in the U.S. have had a banner 2023, returning an average of 148% — led by Marathon Digital (at 120%) and Cipher Mining (356%). Miners have benefited in part from the popularity of Ordinals, which are digital files stored on the Bitcoin blockchain that have helped create an NFT market for bitcoin. 

The bottom line… 

The mainstream crypto narrative appears to be flipping fast, with a number of major catalysts on the horizon that could pour substantial institutional money into crypto markets and crypto-related investment products. Analysts note that new signs from the Federal Reserve show interest rate hikes are likely on hold for the time being. And as CoinDesk reported, open interest in BTC futures has hit a record high, as “institutional investors are chomping at the bit to buy BTC amid renewed optimism of a spot ETF being approved.”