Bitcoin held near 21-month highs on Thursday after U.S. regulators approved a spot bitcoin exchange traded fund (ETF), while the second-biggest cryptocurrency ether gained on hopes that ETFs tracking it could be the next to win approval.
The Securities and Exchange Commission (SEC) said on Wednesday it approved 11 applications for spot bitcoin ETFs including from BlackRock (BLK.N), Ark Investments/21Shares (ABTC.S), Fidelity, Invesco (IVZ.N) and VanEck.
Most of the ETFs are expected to begin trading on Thursday, and the iShares bitcoin ETF (IBIT.O) drew strong demand in premarket trading, with volumes surpassing even those of Apple (AAPL.O), the world's most valuable company.
Bitcoin was last trading around $47,133 up 2.6% on the day, heading back towards Tuesday's 21-month high just below $48,000, which was hit in anticipation of the approval.
It more than doubled in price last year, partially recovering after a turbulent 2022 for the crypto industry when several major companies collapsed, most notably trading venue FTX.
Meanwhile ether, the token that underpins the Ethereum blockchain network, rose 5% to $2,653.8, its highest since May 2022.
“The market’s now quickly moving on to ETH, saying if bitcoin is done, then it’s now very highly likely that the ETH one will get done as well,” said Geoff Kendrick, head of digital asset research at Standard Chartered.
Several firms have filed applications for spot Ethereum ETFs, including BlackRock in November 2023.
Industry participants say U.S.-listed spot crypto ETFs drive greater demand for the underlying digital tokens.
Retail and institutional investors "no longer need to rely on futures trading or self custody to have exposure to bitcoin, and can use a traditional brokerage account," said Nick Ruck, COO of ContentFi Labs, a blockchain firm focused on IP licensing
