In an exhilarating turn of events for cryptocurrency enthusiasts, Bitcoin (BTC) initially surpassed the $31,000 mark on Monday, only to embark on a rapid ascent. Within a short span, Bitcoin surged beyond $32,000, $33,000, $34,000, and ultimately reached $35,000. Binance’s exchange even recorded perpetual contracts approaching $36,000.
This resurgence brought Bitcoin back to levels not witnessed since May 2022, a period marred by the Terra-Luna, Three Arrows Capital, Genesis, and FTX debacles, which significantly dampened industry sentiment, driving BTC close to $15,000 and casting doubts on the industry’s survival.
However, the prevailing optimism can be attributed to the hope that the Bitcoin exchange-traded funds (ETFs) are on the way. Grayscale, which currently administers the largest exchange-traded Bitcoin product, faced SEC rejection in its attempt to transform into a more attractive ETF. Nevertheless, recent legal developments favouring Grayscale’s position have increased the likelihood of obtaining ETF status. BlackRock, the world’s largest asset manager, has also submitted its Bitcoin ETF application to the SEC, along with other traditional financial institutions.
“We’re hearing from clients around the world about the need for crypto,” BlackRock CEO Larry Fink recently told Fox Business.
Fink also put cryptocurrency alongside traditional safe-haven assets like U.S. Treasuries and gold, suggesting its role as a “flight-to-quality” asset. The emergence of the BlackRock ETF on the Depository Trust & Clearing Corp. website, though not indicative of approval, signals optimistic.
“All part of the process of bringing ETF to market,” Bloomberg Intelligence analyst Eric Balchunas posted on X.
During the surge in late-Monday BTC prices, over $167 million in derivative positions were liquidated, contributing to the daily total of $344 million. Open interest, a metric that records the notional value of all derivatives positions, failed to match Bitcoin’s rapid rise, decreasing from $10.5 billion to $9.4 billion due to liquidations. Short positions were stopped out, and profits were taken for long positions.
Galaxy Digital’s market report also highlighted an emerging narrative in the options market: At approximately $32,500, options dealers would need to acquire nearly $20 million of BTC for every 1% upward movement to maintain delta neutrality.