Bitcoin rose to start the week as investors awaited the potential approval of a U.S. bitcoin ETF this week.
On Monday the cryptocurrency rose 1.5% to $45,022.00, according to Coin Metrics, as BlackRock, Grayscale and other potential bitcoin ETF issuers submitted final updates to the Securities and Exchange Commission, including key fee disclosures that bolstered investors confidence that an approval is more likely than not.
“It’s a price war,” said Jim Angel, associate professor specializing in financial market structure at Georgetown University’s McDonough School of Business. “Multiple vendors are coming out of the gate with a nearly identical commoditized product and the only way they can compete is on price.”
Earlier, bitcoin rose as high as $45,208.95. The last time it traded over $45,000 was Jan. 3.
The SEC is approaching its first deadline to approve or reject one of the ETF applications – that of Ark 21 Shares on Wednesday. It is widely expected the agency will approve several applications at once to even the playing field.
“Approval is inevitable,” former SEC chair Jay Clayton told CNBC’s “Squawk Box” Monday when asked what could happen this week. “There’s nothing left to decide. … This is a big step not just for bitcoin but for finance generally.”
That would be a landmark decision for the cryptocurrency industry, which has anti-establishment roots but has demonstrated the value of bitcoin and ether to much of the institutional investing world. Fidelity, Invesco, VanEck, WisdomTree and Franklin Templeton are among the firms vying to launch a bitcoin ETF along with BlackRock.
Many investors say the day one impact of an approval has been overestimated, but that nevertheless, the event itself would create new pathways for inflows from institutions with a longer view.
Galaxy Digital, which has partnered with Invesco on its proposed bitcoin ETF, estimates the addressable market size of a U.S. bitcoin ETF to be roughly $14 trillion in the first year after a launch, and expanding to $26 trillion in the following year and $39 trillion in the third year.
The optimism around bitcoin helped push ether higher by nearly 1%. Several of the same firms vying for a bitcoin ETF have also filed applications to launch spot ether ETFs. The SEC’s deadline on those will come later in the year. Much of the rest of the cryptocurrency market was flat.
Meanwhile, crypto equities fell. Coinbase slipped more than 3%. Among the miners, Iris Energy and Marathon Digital each were down about 4%, while Riot Platforms fell less than 2%.