Last week also marked a major turning point for Bitcoin as the U.S. Securities and Exchange Commission (SEC) approved 11 Bitcoin ETFs after years of opposition.
Bitcoin’s price dropped 8% to $42,800, erasing all the previous week’s gains and pulling the entire cryptocurrency market into the red, according to Coin Metrics. On January 11th, Bitcoin briefly reached $49,058, its highest level since December 2021. Over the past week, the world’s largest cryptocurrency decreased by 2%.
Meanwhile, Ethereum decreased by 2% but still recorded a 12% increase for the week. This is the first week of price gains in the last 3 weeks and also the strongest week of gains since March 2023. Investors are shifting from Bitcoin to Ethereum following the anticipated approval of the Bitcoin ETF.
“We believe that the cryptocurrency market has shifted to a different narrative, as Ethereum has outperformed Bitcoin, possibly due to the expectation of an approved Ethereum ETF,” said Alex Saunders, an analyst at Citi, in a report on January 12th.
The SEC will decide on the Ethereum ETF in May 2024. BlackRock, Invesco, Ark, and VanEck are among the companies that have filed applications for launching ETFs, while Grayscale intends to convert its Ethereum Trust into an ETF.
Many people had previously predicted a sell-off in Bitcoin, as many investors and cryptocurrency miners have made significant profits. In just 3 months, the price of Bitcoin has increased by more than 60%. Market participants agree that Bitcoin’s price will benefit from ETFs, but it will take time for newcomers to familiarize themselves with this type of asset.
In the cryptocurrency market, Litecoin stood out with a rare 11% increase for the week.
