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(Kitco News) – Altcoins have come into focus on Thursday as sideways trading from Bitcoin (BTC) has prompted traders to increase their level of risk in the hopes that they will score outsized gains during this ‘altseason’ interlude to the bull market that has been ramping up over the past few weeks.
While many analysts had been predicting a sizeable pullback for BTC and the broader crypto market following the recent breakout, it appears as though most hodlers have no intention of selling this early into the bull cycle, as evidenced by the 28% drop in 24-hour trading volume to $67.9 billion.
Data provided by TradingView shows that after trading sideways near $44,000 since late on Tuesday, Bitcoin bears attempted to drive the price of BTC lower, dropping it to $42,850 during the morning trading session on Thursday. Bulls successfully defended the push lower and lifted BTC back above $43,600 near midday.
BTC/USD Chart by TradingView
Spot Bitcoin ETF speculation continues to provide support for BTC at these higher levels, with Reuters reporting that discussions between the Securities and Exchange Commission and multiple asset managers hoping to list spot BTC ETFs “have advanced to key technical details, in a sign the agency may soon approve the products.”
Ever since the August court ruling that the SEC was wrong to reject Grayscale’s application to convert its Grayscale Bitcoin Trust (GBTC) into an ETF, “the SEC has been engaging with issuers on substantive details, some of which are usually discussed near the end of an ETF application process, according to half a dozen industry executives and SEC public memos,” Reuters said.
Some of the matters under discussion include “custody arrangements, creation and redemption mechanisms, and investor risk disclosures,” said several anonymous sources.
“BlackRock’s and Fidelity’s efforts in applying for a crypto ETF don’t come as a surprise,” said Adam Berker, senior legal counsel at Mercuryo. “Both companies clearly see the potential for market growth and the chance to profit from it while striving to be the first to secure an advantage. Moreover, they already have the necessary infrastructure, funds, and investors to succeed and significantly impact the further development of the crypto industry.”
Many of these firms have also filed for spot Ethereum (ETH) ETF applications, which has provided a boost to the price of Ether after the second-largest crypto by market cap lagged behind the surging price of Bitcoin.
With Bitcoin in consolidation mode, Ether’s price is now starting to catch up, increasing 2.35% on Thursday to trade at $2,335, marking a 7-day gain of 15.3% and its highest price since May 2022.
ETH/USD Chart by TradingView
“Ethereum, known as the second largest and most widely recognized cryptocurrency after Bitcoin, offers a valuable platform for Blackrock to penetrate this market,” Berker said. “Apart from its recognition, Ethereum supplies significant liquidity. This allows investment funds to acquire ETH beforehand, establishing a liquid reserve. When these funds decide to act, this reserve ensures a vigorous market for transactions, giving it an edge over other altcoins.”
Berker noted that “Another aspect for institutional investors to consider is the importance of maintaining a balance between growth potential and volatility risks. With ETH, there is more growth potential than BTC, while the risk of volatility is lower than that of other altcoins.”
He also highlighted the fact that the CFTC has previously stated that it views Ether as a commodity, which reduced the level of risk for investors. “If a recognized regulatory body does not classify ETH as a security, it offers a safety net for investors. They can be assured that they won’t be accused of trading an unlicensed security in the future,” he said.
“Overall, the expected approval of the ETF will be positive news for the crypto market, likely leading to significant growth,” Berker concluded. “With ETFs getting the go-ahead, a wider range of TradFi investors will have simplified access to crypto assets. With major entities such as Fidelity and BlackRock endorsing this product, substantial institutional capital is expected to flow into the market. This capital influx will likely drive an increase in crypto prices, indicating the industry’s confident outlook.”
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
