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June 19, 2024
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Bitcoin Sees Volatile Trading as Investors Pile Into Crypto Tokens and ETFs



Bitcoin

and other cryptocurrencies experienced volatile trading on Thursday as investors piled into tokens and funds after the Securities and Exchange Commission’s landmark move to approve spot Bitcoin exchange-traded funds.

The price of Bitcoin was up less than 1% over the past 24 hours at $46,700 as of Thursday afternoon. However, the largest digital asset has traded as high as $48,990—the highest point since early 2022—and as low as $45,675 over that period.

Bitcoin soared in the second half of 2023. The cryptocurrency has marched even higher since the start of the year as investors anticipated that the SEC would, indeed, approve spot Bitcoin ETFs—the first such funds in the U.S. that will actually hold Bitcoin tokens themselves. 

Crypto bulls expect regulatory approval to usher in a fresh wave of investor interest in digital assets, especially among prized institutional investors who may have stayed on the sidelines during years without regulatory clarity. This should push prices higher, especially because there is limited Bitcoin supply as long-term holders show an unwillingness to sell. 

While the long-term bull case for the cryptocurrency might hold water, some analysts and market participants have cautioned that a “buy the rumor, sell the news” dynamic could take hold, marking a headwind for Bitcoin in the near term. Trading since the SEC approvals has done little to add clarity to this narrative, with volatility emerging as the only obvious theme Thursday.

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The crypto world, for its part, has cheered the SEC’s decision.

“The approval illustrates a new level of acceptance, maturity and mainstreaming of the crypto market,” Richard Teng, CEO of Binance, the world’s largest crypto exchange, said in a statement.

“This development marks the recognition of Bitcoin as a legitimate asset,” Anthony Scaramucci, founder of hedge fund SkyBridge Capital, said in a statement.

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The SEC, however, has a different message.

“We did not approve or endorse Bitcoin. Investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto,” SEC Chairman Gary Gensler said in a statement. “Bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity.”

Traders, nevertheless, are piling in. More than 92 million shares of Bitcoin ETFs had been traded by midday after their debut Thursday. Tokens were attracting attention, too, with volumes for the U.S. dollar-Bitcoin trading pair up by more than one-third over the past 24 hours, according to data from CoinMarketCap.

Beyond Bitcoin,


Ether

—the second-largest crypto—surged 6% to $2,620. Smaller tokens or altcoins were even higher, with


Cardano

climbing 12% and


Polygon

popping 9%. Memecoins exhibited more of the same, with


Dogecoin

and


Shiba Inu

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up 8% each.

Write to Jack Denton at jack.denton@barrons.com



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