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That followed a 10% surge on Monday, when bitcoin posted its
best day in almost a year, and the bullishness spread across the
wider crypto market and into related stocks.
Any approval by the U.S. Securities and Exchange Commission
(SEC) of an exchange-traded fund (ETF) that owns bitcoin on
behalf of fund investors is predicted to fuel demand.
A spot bitcoin ETF, the argument goes, would allow investors
previously wary of crypto access to the asset via the stock
market, ushering in a new wave of capital to the sector.
"The value of ... any asset, basically, is the amount of people
using it," said Steen Jakobsen, CIO at Saxo. "So the ETF would
make a large audience and increase liquidity."
Bitcoin, a volatile asset whose price has doubled so far this
year, was last up 3.2% at $34,129. The second-largest
cryptocurrency ether climbed to its highest since August.
Crypto-linked shares such as major U.S. exchange Coinbase Global
and bitcoin owner MicroStrategy rose in after-hours trade.
Investment giant BlackRock is among several major U.S. financial
firms with pending applications for bitcoin ETFs.
Speculation on their likely approval was fuelled by BlackRock's
iShares ETF listing on the website of clearing house DTCC. It
was unclear when or why the iShares ETF was added to the DTCC
list. DTCC and BlackRock did not immediately respond to requests
for comment.
Anticipation also grew after reports this month, including from
Reuters, that the SEC won't appeal a court ruling it had been
wrong to reject an ETF application from crypto firm Grayscale
Investments.
"The SEC being pressured by the courts increases the
probability" of an ETF approval, said Standard Chartered's head
of digital assets research Geoffrey Kendrick.
Last week BlackRock denied an erroneous report that its ETF had
been approved.
Data on crypto derivatives analysis site Coinglass showed heavy
bitcoin short-covering in the last 24 hours.
(Reporting by Tom Wilson and Elizabeth Howcroft in London, Tom
Westbrook and Rae Wee in Singapore, and Brigid Riley in
Tokyo.Editing by Shri Navaratnam & Simon Cameron-Moore)
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