Bitcoin at new heights: Bitcoin maintained its position close to a 21-month high on Thursday, following the US Securities and Exchange Commission's (SEC) landmark approval of the first US-listed exchange-traded funds (ETFs) tracking the cryptocurrency. This regulatory move is expected to enhance the digital asset's attractiveness to a broader spectrum of investors.

The SEC confirmed its approval of 11 applications, encompassing firms such as BlackRock, Ark Investments/21Shares, Fidelity, Invesco, and VanEck.

As of 0930 GMT on Thursday, three of the ETFs, including the offering from BlackRock, were actively trading. Additional launches are anticipated later in the day.

Bitcoin was recently priced at around $46,250, registering a 0.6 per cent increase for the day, and sustaining the momentum it had built up earlier in the week in anticipation of regulatory approval.

This year, the preeminent cryptocurrency has surged by nearly 9 per cent, reaching a peak of $47,915 on Tuesday — its highest level since March 2022.

The cryptocurrency's value more than doubled in the previous year, recovering from the turbulence of 2022 that witnessed the collapse of several prominent entities within the crypto sphere, notably trading platform FTX.

Standardised access to digital assets

Marion Laboure, Senior Strategist at Deutsche Bank Research, commented, "A spot Bitcoin ETF essentially offers standardised access to the digital asset as an investment, preserving Bitcoin's fundamental value proposition." Laboure added that while the ETF approval marks a pivotal moment for Bitcoin pricing, volatility is likely to continue.

Although spot Bitcoin ETFs are already accessible in markets such as Canada and Europe, they have yet to captivate significant investor interest. However, industry stakeholders remain optimistic that the US-listed offerings will stimulate greater Bitcoin demand.

Nick Ruck, COO of ContentFi Labs, a blockchain firm specialising in intellectual property licensing, noted that both retail and institutional investors can now gain exposure to Bitcoin through traditional brokerage accounts, eliminating the need for futures trading or self-custody.

Attention within the industry is gradually shifting towards Ethereum, the second-largest cryptocurrency by market capitalisation, which underpins the Ethereum blockchain network. BlackRock submitted an application for a spot Ethereum ETF in November 2023.

Ether's value ascended by as much as 4.4 per cent on Thursday, reaching $2,638 — its highest since May 2022. Geoff Kendrick, Head of Digital Asset Research at Standard Chartered, observed, "With the regulatory approval for Bitcoin now confirmed, market focus is swiftly transitioning to Ethereum, anticipating a similar positive outcome."

(With Reuters inputs)