Bitcoin price hits a year-to-date high as investors’ excitement over BlackRock and Fidelity Investments applying for spot BTC ETFs fuels dreams of a new bull market.
Bitcoin (BTC) price is up today, reaching a 2023 high at $31,431. The fresh BTC price year-to-date high comes amid recent growing institutional interest in Bitcoin from companies like BlackRock and Fidelity Investments, both of which filed for a spot Bitcoin ETF within the past two weeks.
Here is why Bitcoin price is up today.
Institutional interest sparks a Bitcoin rally
Bitcoin price started to rally after BlackRock filed for a spot BTC ETF in the United States on June 15. While BlackRock is not the first to apply with the SEC for a Bitcoin ETF, they are the largest of all current applicants.
To date, the SEC has refused to approve a spot Bitcoin ETF, despite numerous applicants including Cathie Wood’s ARK and 21Shares which has filed for approval three times. Another company that was denied a Bitcoin ETF is Grayscale. After the rejection, the company took the SEC to the appeals court to argue for the soundness of Bitcoin futures.
BlackRock is the world’s largest asset manager with over $8.5 trillion in assets under management. The firm will also utilize Coinbase to custody the BTC in the trust according to the filing with the SEC.
The application has also provided a boost to the Grayscale ETF and the discount is approaching 2023 highs under 35%.
Liquidations could be sending Bitcoin price higher
In early June 2023, short-sellers were liquidated at a lower rate than longs. The BlackRock ETF filing announcement on June 15 has shifted fortunes away from short-sellers with over $220 million in shorts liquidated since that date. In the past 24-hours alone, over $31 million BTC shorts have been liquidated.
Despite the short-seller losing streak, it seems that this investor group is doubling down. On June 23, 53% of options were skewed short which could potentially create an opportunity for a short-squeeze and greater Bitcoin price upside.
The cooling US dollar index could be good for Bitcoin price
Another positive sign for Bitcoin price is the cooling U.S. dollar index (DXY). Historically when the DXY index retracts, sentiment for risk assets like Bitcoin increases.
Since interest rate increases were paused by the Federal Reserve last week, some market participants think that the U.S. economy may grow and the dollar could continue to cool. If this happens, Bitcoin could continue to rally alongside equities markets. The better the macro climate, the better for Bitcoin price.
Typically, there is a close correlation between Bitcoin and equity indices like the S&P 500. After interest rate increases were paused by the Federal Reserve on June 14, equities saw a large bounce while Bitcoin price retracted. Now it seems like the current Bitcoin rally is allowing the BTC price to catch-up.
Some market participants think that the U.S. economy may grow and the dollar could continue to cool. If this happens, Bitcoin could continue to rally alongside equities markets.
While Bitcoin price is showing some bullish momentum in the short-term after the BlackRock news and cooling dollar, the Bitcoin Fear & Greed Index has reached a 3-month high.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.