On Monday, Hong Kong’s Securities and Futures Commission (SFC) announced that it had approved trading in a number of spot Bitcoin and Ethereum ETFs. This decision has been a long time in the making and has been anticipated by everyone in the cryptocurrency community. As expected, this announcement proved to be optimistic for the market, with cryptocurrency prices seeing a notable recovery globally.
Bitcoin rebounds towards $67,000
Over the weekend, the cryptocurrency market witnessed a market crash that sent the price of Bitcoin back below $60,000. This development was driven in part by the move from Iran to Israel, which many predicted would be the start of World War III. However, both sides later backed off, giving the market time to recover.
Amid this recovery came the announcement of the Hong Kong SFC, giving the market a much-needed boost. The price of Bitcoin has been trending around the $64,000 level since the ceasefire, and this announcement caused the price to rise further.
One of the reasons the Hong Kong SFC approved spot Bitcoin and Ethereum ETF trading in this space is the success of spot Bitcoin ETFs in the United States. Bitcoin prices also rose quickly as institutional investors packed BTC to back their funds.
In the same vein, once Chinese investors have access to spot Bitcoin and Ethereum ETFs, we expect to see a lot of buying as funds will be required to hold the underlying cryptocurrencies to back their investments. We expect to see more purchases this way in the coming weeks.
Can BTC Recoup $70,000?
Despite the weekend selloff, there is still bullish territory left in the market, showing that cryptocurrency investors believe the selloff is an opportunity to buy again. This is proven by the Bitcoin price, which has already risen by more than 3% in the last day and exceeded $66,000. It will happen.
Spot Bitcoin ETF issuers also continue to purchase assets, increasing AuM to over 4.7% of total BTC supply. As Hong Kong funds join the competition, the proportion of BTC supply held by institutional investors is expected to increase rapidly, and this competition to purchase assets may lead to a supply shortage.
In the event of a supply shortage, the price of Bitcoin could rise quickly and regain the $70,000 level once again, a move of less than 5% from here. BTC would then need to move around 12% to hit a new all-time high, which has proven to be easily doable over the past few months.
BTC price at $66,200 | Source: BTCUSD on Tradingview.com
Featured image from Reuters, chart from Tradingview.com