Well, it’s Christmas time and so is the renewed excitement among Bitcoin investors. The Bitcoin price has climbed back once again above $50,000 for the first time in two weeks as investor sentiment turns positive across financial markets just before the holidays.
As of press time, Bitcoin is trading 5.22% up at a price of $51,031 with a market cap of $966 billion. After setting up a record high of $69,000 in November last month, Bitcoin has been continuously moving sideways correcting more than 30%.
With inflation reaching new highs and the Fed announcing tighter monetary policies money has been moving from volatile asset classes like crypto and equities to other safe-haven instruments. While many see Bitcoin as a hedge to equities, it hasn’t been that so far! Ross Mayfield, an investment strategy analyst at Baird told Bloomberg:
“I view Bitcoin as a high-beta risk asset. When risk appetite is up, it’s up big. And when risk appetite is down, it can be down big. It’s not perfectly correlated, that’s definitely too simple of a read, but it’s certainly not a volatility hedge.”
SEC Rejects Two Bitcoin Spot ETFs
Well, today’s price surge comes despite the U.S. Securities and Exchange Commission (SEC) rejecting two Bitcoin spot ETFs. While the SEC has shown familiarity with the Bitcoin Futures ETFs, it has shown strong objection to the approval of the physically-backed Bitcoin ETF.
The U.S. SEC has rejected two Bitcoin spot ETF proposals from Valkyrie Investments and Kryptoins stating that they have failed to meet the regulator’s requirement of preventing manipulative practices and frauds.
The spot Bitcoin ETFs remain as the holy grail of investment products and this is likely to bring massive liquidity to Bitcoin. Eric Balchunas, a Bloomberg Intelligence analyst, calls the latest rejection as a “Scrooge-jection”. He further added:
“The fact that the SEC is disapproving faster than they needed to — we were optimistic about futures, but we’re not confident in a 2022 approval”.