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Bitcoin Skyrockets Pasts 100% in 2023, the Reason is Strange

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By Abi Gibson - - 5 Mins Read
Bitcoin placed on a piece of paper bearing the inscription of an uptrend graph
Photo | Shutterstock
Bitcoin placed on a piece of paper bearing the inscription of an uptrend graph
Photo | Shutterstock


In June, BlackRock filed an application to register a Bitcoin spot ETF. As the world's largest ETF provider, BlackRock manages trillions of assets.


The idea is that BlackRock's potential bitcoin ETF would give maximum credibility to the cryptocurrency.


Bitcoin has experienced a recent pump, with more than an 11% increase, reaching $33,316. On the other hand, Chainlink's (LINK), Polkadot's native token (DOT), and Polygon's (MATIC) have been among the top-performing large-cap digital assets, with gains ranging from 6% to 10%. Ether (ETH) and Ripple-related tokens (XRP) saw little gains of 2% to 3%.

What could be the Catalyst? 

Bitcoin had been trading within a tight range of approximately $27,000 to $28,000 for several weeks. Then, a few days ago, Bitcoin pumped suddenly above $30,000 due to a social media tweet about BlackRock's spot ETF approval by the U.S. Securities and Exchange Commission (SEC). Although the tweet was immediately corrected, Bitcoin retained some of its gains.


Earlier this week, market observers noticed the ticker for BlackRock's spot Bitcoin ETF (IBTC) appearing on the DTCC's website.


This news led many to believe that SEC approval was just around the corner. It created an unexpected bullish sign that took both short sellers and dealers by surprise, causing a price spike to $35,000 on Monday evening.


Bitcoin chart on Bybit
Bitcoin spiked up to $35k before slightly dropping | Bybit


However, by Tuesday evening, another news carried that the IBTC ticker's presence on the DTCC website had no connection with the possible arrival of a spot Bitcoin ETF.


Yet the price of bitcoin remains very close to Monday’s high. Despite the confusion, many still believe that introducing a spot Bitcoin ETF could be a major catalyst in the crypto market cycle.


What's next in BTC price?

From Glassnode's data, nearly 70% of Bitcoin's supply has remained untouched for a year, and about 30% of tokens have not changed hands in five years.


The combination of historically illiquid markets and a significant amount of bitcoin held by long-term investors set the stage for a supply shock. 


Two false spot ETF stories influenced the recent Bitcoin pump. Surprisingly, the price held firm even after the misinformation was debunked, suggesting that the surge was driven solely by the anticipation of positive news.


This week's sudden surge took options dealers by surprise and contributed to the sharp price movement in the crypto market cycle.


In a market report, it was explained that at a peak of around $32,500, options dealers would have to purchase nearly $20 million worth of BTC for every 1% upward movement.


This is done to maintain a balance in the crypto market cycle. It also implies that as the spot price rises, market makers are compelled to repurchase increasing amounts, which adds volatility to short-term movements.


Despite the initial rejection of Grayscale's ETF by the US Securities and Exchange Commission, a three-judge panel at the DC Court of Appeals in August overturned this decision. The panel said the regulator had failed to explain why it rejected the firm’s application.