Monday was one of those trading sessions where a blindfolded investor could throw a dart at a big list of cryptocurrency investments and hit a gainer no matter what. The prices of a great many coins, tokens, and stocks of companies heavily involved in the crypto sphere shot higher on the day, many at double-digit rates.
Among those “double Ds” was Bitcoin SV (BSV), the Bitcoin hard fork, which raced 16% higher in late afternoon trading. Crypto mining companies Bitfarms (BITF 11.97%) and Cleanspark (CLSK 12.22%), meanwhile, both closed the stock trading day at around the 12% mark. Bitcoin Cash (BCH 6.09%) didn’t do as spectacularly but still managed to rise more than 8%.
Rumors of a new Bitcoin ETF were greatly exaggerated
The day kicked off with an X (formerly Twitter) posting on the account of crypto news website Cointelegraph that the first U.S. Bitcoin spot price exchange-traded fund (ETF) had been approved. The post had it that financial services company BlackRock was given the nod by the Securities and Exchange Commission (SEC).
Such an approval would be understandably, and very positively, crypto-market moving. It would further legitimize the still-debated idea that cryptocurrencies are legitimate and valid investments. Almost needless to say, it would also probably lead to a surge in folks placing bets not only on Bitcoin directly but also on other well-known coins and tokens.
Alas, the posting turned out not to be accurate (to its credit, Cointelegraph later admitted it was erroneous and apologized for it being published).
Interestingly, the early surge of many crypto assets faded only slightly — if at all — following the revelation. This is an interesting dynamic, considering that the source of the initial rally was discredited.
Why the crypto bulls continued to stampede
It’s interesting, but in retrospect, not all that surprising. Optimism is in the air in many corners of the crypto investing world, one reason people leaped into such investments on Monday’s apparent BlackRock news.
The fact that most seemed to stay there is due in no small part to the fact that that more crypto-adjacent investments — like spot price ETFs — are sure to hit the market before long. Demand for them is too strong for regulators such as the SEC to resist pushes for approval.
Meanwhile, to many, the macro environment is favorable for the speculative investments that cryptocurrencies and related stocks represent.
Further investment rate hikes are expected, but there are some who believe the Fed has reached its peak of inflation-fighting and will keep rates steady (before the eventual cuts as inflation gets tamed). Stagnant or lower rates favor assets perceived to be relatively risky, as they limit the attractiveness of more conservative investments like bonds.