That’s a ~13% jump in 24 hours!
The jump is due to a recent wave of requests for Bitcoin ‘Exchange Traded Funds’ (ETFs, if you’re mean).
Here’s what that means, and more importantly – how it got us here:
A Bitcoin ETF is a fund that lists its shares on an exchange and then buys up Bitcoin. The more shares bought, the more Bitcoin the fund buys.
This means that US stock traders can buy Bitcoin by proxy, without having to worry about the typical legal implications of buying crypto.
This is a big problem 👈 so big that we used bold AND italics.
(Why not underline it too? Because we have decorum and self-respect, thank you very much).
At this point, none of these ETFs have been approved, but there’s a lot of confidence in the market that at least one of them will be.
And that’s how we got here:
Investors are trying to pre-empt the approval announcement and buy up BTC while it is cheap.
The watered down logic of it all is:
The US stock market is worth about $40 trillion (with a T) → a Bitcoin ETF makes it easy (and legal) to spend some of that value buying BTC → The current total value of Bitcoin is ~$ 600 billion → even a small allocation of the total value of the US stock market would have a HUGE effect on BTC.
(For context, if US stock traders allocate ~1.5% of their portfolios to BTC, it would literally double Bitcoin’s current total value).
As with all things in life, this can be transient – these ETF applications may very well be rejected.
But even if only one gets approved, it will be a BIG moment for Bitcoin!
Now. Who wants to practice karate in the garage?