On Monday, the Hong Kong Securities and Futures Commission (SFC) announced that it had approved a number of Spot Bitcoin and Ethereum ETFs for trading. This decision has been a long time in the making and has been expected by all in the crypto community. As expected, the announcement turned out to be bullish for the market, driving a notable recovery in the prices of cryptocurrencies all across the space.
Bitcoin Bounces Toward $67,000
Over the weekend, the crypto market saw a market crash that sent the Bitcoin price back below $60,000. This development was brought about partly by the move from Iran toward Israel, with many anticipating that it would be the start of World War III. However, both sides have since backed down, giving the markets time to recover.
Amid this recovery came the announcement from the Hong Kong SFC, which has given the market a much-needed boost. The Bitcoin price had been trending around the $64,000 line following the cease-fire, and the announcement pushed it further.
One reason the Hong Kong SFC approving the trading of Spot Bitcoin and Ethereum ETFs in the space is due to the success of Spot Bitcoin ETFs in the United States. As institutional investors packed up BTC to back the investments in their funds, the Bitcoin price rose rapidly alongside it.
In the same vein, as Chinese investors gain access to Spot Bitcoin and Ethereum ETFs, a lot of buying is expected to happen as the funds have to hold the underlying cryptocurrencies to back the investment. This way, more buying is expected to happen in the coming weeks.
Can BTC Reclaim $70,000?
Despite the weekend flush, there is still a lot of bullishness in the market, showing that crypto investors believe the crash was a chance to buy back in. Bitcoin’s price, already up over 3% to above $66,000 in the last day alone, proves this to be the case.
In addition, Spot Bitcoin ETF issuers continue to buy the asset, increasing their AuM to over 4.7% of the total BTC supply. As the Hong Kong funds join the race, the portion of the BTC supply owned by institutional investors is expected to grow rapidly, and this competition to buy up the asset could lead to a supply squeeze.
In the case of a supply squeeze, the Bitcoin price could rise quickly to reclaim the $70,000 level once more, which is a less than 5% move from here. Then, to reach a new all-time high, BTC would have to move around 12%, something that has proven easy to do in the last few months.
BTC price at $66,200 | Source: BTCUSD on Tradingview.com