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El Salvador’s GDP Could Soar 10X with Bitcoin: Cathie Wood

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El Salvador president Nayib Bukele recently hosted the CEO of ARK Invest, Cathie D. Wood, and prominent economist Art Laffer to discuss opportunities relating to cryptocurrencies, new capital markets, and innovation opportunities in the nation. According to reports, Wood is optimistic about El Salvador’s economic outlook, stating that its gross domestic product could increase tenfold in the next five years because of its commitment to artificial intelligence and Bitcoin.

Being one of the most prominent institutional investors in the cryptocurrency space, Wood’s endorsement and support can spark significant institutional interest and investments in the nation’s Bitcoin initiatives. The leading AUM could bring investment relating to mining operations, technological development, and educational programs.

El Salvador
El Salvador's GDP Could Soar 10X with Bitcoin: Cathie Wood 2

Earlier, Argentinian regulators led discussions with their counterparts in El Salvador regarding Bitcoin adoption. According to an official statement, senior Argentinian officials met with the head of El Salvador’s National Digital Assets Commission [CNAD]. The discussions revolved around potential cooperation agreements related to digital assets, marking a pivotal step towards deeper engagement with cryptocurrency regulation.

High-ranking officials from the CNV, including President Roberto Silva and Vice President Adriana Boedo, traveled to the nation to gain insights into the country’s pioneering approach to Bitcoin regulation. They met with Juan Carlos Reyes, the President of CNAD, to understand how the country has managed to integrate Bitcoin into its financial system as legal tender.

El Salvador’s Bitcoin Bet

Silva commended the nation’s establishment of the CNAD and emphasized the importance of their experience for Argentina’s regulatory framework, as reported by TronWeekly.

The developments come amidst El Salvador’s preparation to launch its first-ever capital raise using Bitcoin, in partnership with Bitfinex Securities. This event heralds a new era in the nation’s financial landscape. Bitfinex Securities, which allows issuers to raise capital through equity offerings and admission to trading, first arrived in El Salvador in January 2024. It became one of the earliest registered and licensed digital asset service providers in the nation.

By disintermediating traditional finance and democratizing capital and investments, this initiative aims to make them accessible to a broader audience, hence symbolizing the next phase in El Salvador’s Bitcoin-based capital markets.

Bitcoin Soars: Ark Invest Predicts 19.4% Portfolio Power Surge

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In the ever-evolving landscape of investment, the digital asset Bitcoin has emerged as a compelling contender, gaining increasing attention from investors and financial institutions alike. Ark Invest’s Big Ideas 2024 report sheds light on the optimal allocation proportion of Bitcoin in investment portfolios, signaling a remarkable shift over the years.

In 2015, the suggested allocation to Bitcoin was a mere 0.5%. Fast forward to 2023, and the recommended allocation has surged to a substantial 19.4%. This seismic increase underscores the growing recognition of Bitcoin as a viable investment option.

Global implications come into play when considering Bitcoin allocations. The report posits that a mere 1% allocation to Bitcoin on a global scale could propel its price potential to $120,000. However, a more aggressive approach, with a 19.4% allocation, could see Bitcoin’s price soaring to an astonishing $2.3 million.

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Source: Big Ideas 2024 Report

It’s crucial to note, however, that BTC’s journey is not without its challenges. The digital currency operates in a largely unregulated environment, making it susceptible to fraud and manipulation. Furthermore, BTC’s significant price volatility and lack of liquidity pose unique and substantial risks for investors.

Bitcoin’s Past Doesn’t Guarantee Future Performance

The report emphasizes the importance of consulting with financial professionals before delving into BTC investments, underscoring that the information provided is based on research rather than explicit investment advice. Historical performance is not indicative of future results, and caution is warranted given the uncertainties surrounding the cryptocurrency market.

To understand the rationale behind these recommendations, the report introduces key terms and concepts such as the Sharpe Ratio, Efficient Frontier, Compound Annual Growth Rate (CAGR), and Standard Deviation. These metrics help evaluate the risk-adjusted return, portfolio optimization, and growth potential associated with BTC allocations.

BTC, often referred to as a new asset class, stands apart from traditional investments like commodities, real estate, bonds, and equities. Its decentralized nature and community-driven governance add a layer of uniqueness. BTC’s correlation with traditional assets is relatively low, making it an intriguing option for diversification.

Highlighting its performance, the report indicates that, over the past seven years, Bitcoin has outperformed major assets with an average annualized return of approximately 44%, compared to the 5.7% average for other assets. While BTC’s short-term volatility might raise eyebrows, a long-term investment horizon has historically been key to realizing its potential.

In conclusion, the evolving landscape of Bitcoin in investment portfolios signifies a paradigm shift. As institutional interest grows and allocation strategies adapt, BTC’s ascent in the global financial arena appears inevitable. Investors, however, must navigate carefully through the uncertainties, seeking professional advice and understanding the intricacies of this burgeoning digital asset.

Bitcoin ETF Nears Approval As Ark Invest and 21Shares Amend Filing

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Ark Invest, the investment firm led by Cathie Wood, and 21Shares, a Swiss-based crypto asset manager, have made another change to their joint filing for a spot Bitcoin ETF ($ARKB) on the eve of the final deadline set by the U.S. Securities and Exchange Commission (SEC).

The two firms submitted amendment no. 5 to the form S-1 registration statement on Thursday, December 28, 2023, amid high expectations of a positive decision from the SEC in the coming weeks. The latest amendment is said to focus on changes to the terms followed by the authorized participants, who are responsible for creating and redeeming shares of the ETF.

However, this may not be the last amendment before the Ark 21Shares Bitcoin ETF launch, according to Eric Balchunas, senior ETF Analyst at Bloomberg. He tweeted that the naming of authorized participants could be seen in the final effective update before the ETF goes live. He also added that it is unclear if the SEC and the Ark 21Shares partnership have agreed.

Ark Invest Positions For ETF Momentum

The amendment from Ark 21Shares comes as the Cathie Wood firm closed out its position in the Grayscale Bitcoin Trust (GBTC), a popular investment vehicle that offers exposure to Bitcoin through a trust structure. This move suggests that Ark Invest is preparing for a shift in strategy ahead of the Bitcoin ETF approval in early January 2024.

Wood has been vocal about her bullish outlook on Bitcoin and her confidence in the SEC’s approval of a spot ETF, which would track the price of the underlying asset directly, unlike the futures-based exchange-traded funds already available in the U.S. market. In a recent interview, Wood’s discussions with the SEC staff on the ETFs are very positive and encouraging.

On the other hand, the crypto community eagerly awaits the Bitcoin Halving event, which is expected to occur in the second quarter of 2024. Halving is a process that reduces the number of new bitcoins created by half every four years, making the supply of the cryptocurrency more scarce and potentially increasing its value. Significant price rallies have followed the previous halving events.

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Ark Invest Sells More Coinbase Shares; Wraps Up GBTC Exit

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Remaining steadfast in their commitment, Ark Invest, under the guidance of Cathie Wood, made strategic moves in their portfolio by selling an additional 148,885 shares of Coinbase, amounting to approximately $27.5 million, on December 27. Concurrently, Ark Invest also liquidated its entire stash of Grayscale Bitcoin Trust [GBTC] worth $200 million on Dec. 28, revealed Bloomberg ETF analyst Eric Balchunas. This strategic maneuver is part of the firm’s ongoing efforts to recalibrate its fund weightings.

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Ark Invest Sells More Coinbase Shares; Wraps Up GBTC Exit 6

Delving deeper into the specifics, Ark Invest exhibited a sophisticated strategy in managing its portfolio, where the ARK Next Generation Internet ETF [ARKW] opted to part ways with Coinbase shares. The rationale behind this decision is in line with Coinbase’s remarkable 54.6% surge in value over the last month.

Meanwhile, half of the proceeds from the GBTC sale, equivalent to approximately $100 million, were employed by the prominent AUM to venture into Bitcoin Futures ETF Bito. Nonetheless, experts in the field of ETFs suggest that this move serves as a transient placement for the investment firm, to seek a portfolio with enhanced liquidity. According to Eric Balchunas, an ETF analyst at Bloomberg, Ark’s complete divestment from GBTC has positioned it as the second-largest holder of Bito.

Ark Invest CEO Spills Trade Strategy

Ark Invest also positioned itself by acquiring 4,320,928 units of the ProShares Bitcoin Strategy ETF [BITO], a U.S. bitcoin futures-linked ETF. Notably, institutional players, including Ark Invest, eagerly await SEC approval for the first-ever spot Bitcoin ETF filing.

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Source: YouTube

In a recent interview, Cathie Wood shed light on Ark Invest’s strategic moves, including the earlier sale of $13 million worth of Grayscale Bitcoin Trust [GBTC] and the ongoing divestment of $200 million in Coinbase shares. Wood explained that these actions are driven by portfolio management considerations. She highlighted the positive performance of Bitcoin this year and the closing of the discount relative to Net Asset Value [NAV] for GBTC, constituting a dual impact on appreciation.

Wood Further commended the SEC’s evolving stance on cryptocurrency. She emphasized the regulator’s shift from outright denials to active discussions as a positive development, signifying a deepened understanding of relevant issues.

Bitcoin ETF Buzz: Ark Invest’s Cathie Wood Upbeat For 2024

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Ark Invest CEO Cathie Wood expressed optimism regarding the Securities and Exchange Commission’s stance on Bitcoin exchange-traded funds [ETFs]. Wood praised the regulator’s evolving approach, emphasizing that the regulator’s previous pattern of outright denials followed by active discussions signifies a positive shift. According to Wood, this reflects the SEC’s deepened understanding and knowledge of the relevant issues.

In a recent communication, the SEC set December 29 as a deadline for the submission of ETF applications. Wood interpreted this as the SEC imposing a deadline on itself, signaling a proactive approach to managing its workload effectively. She explained that the message was clear: if entities are not ready by the specified date, or around January 10, they should refrain from submitting further applications.

During discussions about feedback from the SEC, Wood highlighted the pivotal concerns surrounding ETF applications. These include determining the tax impact of transactions and addressing whether transactions will primarily involve cash. Additionally, there are apprehensions about banks becoming involved in cryptocurrency, raising important questions that need resolution.

Wood expressed hope that SEC approval would incentivize cautious institutional investors, potentially triggering a substantial boost in Bitcoin prices. Even a modest 0.1% movement, according to Wood, could have a significant impact. Ark Invest has submitted a total of five ETF proposals, covering Bitcoin and Ethereum futures.

Bitcoin ETF Would Gain Traction If…

Wood acknowledged the success of 21Shares, a major ETP crypto provider in Europe with around $2 billion in assets. Ark Invest aspires to replicate this success in the U.S. Wood emphasized that a spot Bitcoin ETF would gain traction once institutions and other investors establish a foothold in the cryptocurrency space. She noted, “They will want ways to diversify, and we wanted to be ready to actively manage diversification strategies.”

Looking ahead to 2024, Wood predicts a continuation of the positive trend observed in 2023, during which Bitcoin achieved a record 50% gain despite challenges such as the regional bank crisis, exemplified by the bankruptcy of Celsius. Wood remains optimistic about the future of Bitcoin and the cryptocurrency market, envisioning continued growth and resilience.

In summary, Wood’s forward-looking perspective anticipates further gains and development in the crypto market in the coming years.

ARK Invest Sheds GBTC Holdings As Bitcoin Surges To 43k

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ARK Invest, the flagship fund of billionaire investor Cathie Wood, has sold $28 million worth of its shares in the Grayscale Bitcoin Trust (GBTC), a popular vehicle for investing in bitcoin (BTC), as the cryptocurrency approached its all-time high of over $43,000.

The sale of ARKW’s holdings of GBTC has reduced to 3.4 million shares ($117.4 million) from 9 million shares in July. ARKW bought GBTC shares at an average price of $24.08 per share in July 2021, when bitcoin was trading below $30,000 and GBTC was trading at around $40 per share.

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Source: Cathiesark

Since the initial purchase, both Bitcoin and GBTC have soared in value, with Bitcoin reaching a new record high of over $42,900 on Monday and GBTC trading at around $34 per share.

BTC 1D graph coinmarketcap 1
Source: CoinMarketCap

Bitcoin is currently trading at $ 43,063.61 with a current market cap of $840.41 Billion. 24-hour trading volume is $25.97 Billion. Bitcoin is +5.2% in the last 24 hours. Over the last 30 days, Bitcoin has increased by 17.39%. Due to this, we can only recover slightly in the coming month.

Ark Invest’s Visionary Crypto Investment Strategy

Ark Invest is known for its innovative and visionary approach to investing in disruptive technologies and companies. The firm has been investing in crypto-related stocks since 2018 when it launched its first Bitcoin ETF.

Since then, Ark Invest has expanded its crypto portfolio to include other digital assets and platforms, such as Ethereum, Cardano, Polkadot, Chainlink, Uniswap, and more. The firm also holds shares of Grayscale Bitcoin Trust (GBTC), a fund that tracks the price of Bitcoin and trades on major exchanges.

Ark Invest’s founder and CEO, Cathie Wood, is one of the world’s most influential and respected investors. She is also known for her bold predictions and contrarian views on various markets and sectors.

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ETF Approval: BlackRock And ARK Invest Embrace SEC’s Cash-Only Model

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BlackRock and ARK Invest have revised their S-1 registration statements for spot Bitcoin ETFs in response to the cash redemption model imposed by the U.S. Securities and Exchange Commission (SEC).

The two major applicants for a spot Bitcoin ETF in the U.S., which would track the price of Bitcoin directly rather than through futures contracts or other derivatives, have agreed to accept the cash-only requirement for their proposed funds.

The S-1 amendments were filed on Dec. 18, along with other applications from WisdomTree, VanEck, Valkyrie Asset Management, and Invesco. The cash-only model means that authorized participants (APs), who are entities that can create or redeem shares of an ETF on behalf of investors, can only obtain more shares by bringing cash to the table.

This contrasts with some other spot Bitcoin ETFs that allow in-kind redemptions, which involve non-monetary payments like BTC. ARK’s registration statement indicated that its ARK 21Shares Bitcoin exchange-traded funds would only allow cash creations and redemptions.

The document stated: “Potential in-kind creation and redemption of shares,” adding: “Subject to regulatory approval.” BlackRock followed suit with its iShares Bitcoin Trust ETF S-1 amendment: “These transactions will take place in exchange for cash,” it read: “Subject to regulatory approval.”

SEC’s Cash-Only Model: Impact On ETF Approval

The SEC’s cash-only model is seen as a victory for crypto regulation by some experts and advocates. According to Bloomberg analyst Eric Balchunas, ARK and its partner 21Shares did not want to do cash creations because they feared they would face more scrutiny from regulators than those using in-kind redemptions.

Balchunas stated that if the companies surrender their applications, the SEC will not compromise. This signifie­s the discussion has concluded. He continued, For those seeking January authorization, this re­sult may be favorable.

The SEC has been reluctant to approve any spot Bitcoin exchange-traded funds due to market manipulation, fraud, custody issues, liquidity risks, and investor protection concerns. However, some analysts believe that the SEC may be open to approving some spot Bitcoin ETFs if they meet certain criteria.

“It will make it clear where the ETF gets its underlying Bitcoin from — the ETF will buy them, presumably from reputable exchanges, whereas if you allowed in-kind transfers you wouldn’t be able to know where the Bitcoin transferred came from.”

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Bitcoin ETF Countdown: A Game-Changer for Crypto & Traditional Finance Integration

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Bitcoin takes center stage as anticipation mounts for the potential approval of a spot Bitcoin Exchange-Traded Fund (ETF). This significant development could pave the way for traditional financial channels to enter the digital asset space. As highlighted in a recent report by IntoTheBlock, the excitement, and speculation surrounding this prospect have captured the attention of both traditional finance behemoths and crypto enthusiasts alike.

Bitcoin ETF Speculation Soars

Meanwhile, companies like Grayscale have been at the forefront of the push for a Bitcoin ETF, but the approval process has proven to be lengthy and arduous. Despite pioneering efforts, applications from various crypto sector entities, including Grayscale, are still pending approval.

As the final deadline for pending applications looms, the anticipation and interest in the crypto community are reaching new heights. The Securities and Exchange Commission (SEC) holds the authority to extend the decision-making process up to three times before issuing a final decision. Ark Invest is scheduled to reach its deadline on January 10th, 2024, marking a crucial moment in the unfolding saga.

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Source: IntoTheBlock

A significant development that has fueled optimism in the market was the simultaneous listing of nine Ethereum futures ETFs on October 2, signaling a potential shift in the SEC’s approach. Speculation suggests that the SEC might opt for a comprehensive approval strategy rather than addressing each application individually, avoiding any appearance of favoritism.

Reflecting on the recent past, the bear market of early 2022 led to Grayscale’s Bitcoin Trust (GBTC) trading at a considerable discount relative to its BTC holdings. The downfall of Genesis, a branch of Digital Currency Group and the owner of Grayscale, exacerbated the discount, reaching a record high of nearly 50% by the end of 2022.

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Source: IntoTheBlock

However, the landscape shifted in the summer of 2023 with BlackRock’s application for a Bitcoin ETF. With an impressive track record of 575 approvals out of 576 ETF applications and nearly $10 trillion in assets under management, BlackRock injected optimism into the market, reducing GBTC’s discount. Grayscale’s legal victory against the SEC for denying its transition to an ETF further solidified the changing dynamics in the industry.

The market response was evident in the 320% surge in GBTC’s price throughout 2023, outpacing BTC’s 165% increase during the same period. This divergence in price changes and the disparities between GBTC and BTC highlighted differences in volatility and investor sentiment.

Bitcoin’s ETF Volatility Analysis

At the peak of the price divergence, the correlation between GBTC and Bitcoin reached -0.27, indicating that GBTC was trading almost inversely to Bitcoin. Over the last two years, GBTC’s volatility soared to 103%, surpassing Bitcoin’s highest peak volatility at 61%.

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Source: IntoTheBlock

Analyzing the trend of approved Bitcoin futures ETFs, such as BTF and BITO, reveals consistently higher 30-day volatility compared to BTC. This heightened volatility can be attributed to the monthly rollover of contracts, where futures ETFs buy Bitcoin at a premium, leading to increased performance disparities.

The report suggests that a potential spot ETF could be a more advantageous product. With the ability to redeem funds, a spot ETF would likely offer more accurate tracking and reduced volatility compared to futures ETFs.

While the concept of a Bitcoin spot ETF has been a long-standing topic of conversation, recent events point to a shifting landscape and a growing convergence between traditional finance and the cryptocurrency market. The evolving dynamics underscore the increasing recognition of cryptocurrencies as a significant asset class, marking a pivotal moment in the industry’s trajectory.

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Cathie Wood’s Ark Invest Continues Selling Spree: Offloads $27.8 Million

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In a move that continues its recent trend, Cathie Wood’s Ark Invest reportedly sold additional shares of both Coinbase and Grayscale Bitcoin Trust (GBTC) on Wednesday. According to the company’s latest trade filing, Ark offloaded 180,422 Coinbase shares, equivalent to $24.3 million, and 99,595 GBTC shares, amounting to $3.5 million.

ARK Invest Unloads $27.8 Million in Coinbase & GBTC Shares

Breaking down the Coinbase sales, Ark sold 12,474 shares worth $1.7 million from its Fintech Innovation ETF, 5,369 shares valued at $723,000 from its Next Generation Internet ETF, and a substantial 162,579 shares amounting to $21.9 million from its Innovation ETF.

This follows the trend set earlier in the week, with Ark selling $33.3 million worth of COIN on Tuesday and $1.4 million on Monday. In total, the investment management firm has divested $59 million in Coinbase shares from its funds this week, with an additional $15 million sold the previous week.

As of the latest market close, Coinbase stock was priced at $134.63, marking a 7% increase over the past week, a 55% surge over the past month, and an impressive 269% year-to-date gain. This ascent has propelled Coinbase to its highest level in 18 months, according to data from TradingView.

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Source: Tradingview.com

Simultaneously, Ark Invest’s selling spree extended to GBTC shares, with 99,595 shares, equivalent to $3.5 million, offloaded from its Next Generation Internet fund. This follows the sale of 168,127 GBTC shares totaling $5.9 million on Tuesday. GBTC shares closed at $34.92, reflecting a 14% increase in the last week, a 28% gain over the past month, and an astounding 325% year-to-date surge, according to TradingView.

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Source: TradingView

The price appreciation of GBTC shares correlates with the recent surge in the underlying value of bitcoin, which has witnessed a 16% increase over the last seven days, a 25% uptick over the past month, and a remarkable 166% surge year-to-date, currently trading at approximately $43,309.

Ark’s decision to sell GBTC shares aligns with the recent narrowing of GBTC’s discount to net asset value (NAV). The discount, which measures the difference between the market price of each share and the value of the bitcoin it represents, has decreased from over 40% in June to approximately 11%, as reported by YCharts.

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Source: YCharts

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SEC Engages with Exchanges Over Bitcoin ETF Approvals, Favors Cash Creates

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In a recent X post, Bloomberg ETF analyst Eric Balchunas revealed that the U.S. Securities and Exchange Commission’s (SEC) Trading & Markets division has been in discussions with cryptocurrency exchanges regarding spot Bitcoin exchange-traded fund (ETF) applications.

Bitcoin ETF Shift: SEC Favors Cash Creates

According to Balchunas, the SEC has advised exchanges that it prefers ETFs to use cash creates rather than in-kind transactions. The SEC has reportedly requested exchanges to submit amendments in the coming weeks.

Balchunas characterized the SEC’s stance as unsurprising but viewed it as a positive indication of progress in the ETF approval process. He emphasized the SEC’s preference for cash creates, as it places the responsibility on issuers to transact in Bitcoin without involving broker-dealers who cannot directly handle the cryptocurrency.

The analyst pointed out that only 2-3 filers had initially planned to use cash creates, while the majority favored in-kind transactions. This development may necessitate adjustments by filers to align with the SEC’s preference or risk potential delays in the approval process.

While acknowledging the SEC’s perspective on cash creation, Balchunas noted that from an investor’s viewpoint, in-kind transactions might be more favorable due to considerations such as spread and taxation. He speculated that some issuers may push for in-kind transactions successfully during their engagements with SEC staff.

Despite these developments, Balchunas maintained the 90% odds, previously suggested with colleague James Seyffart, that the SEC would approve the spot Bitcoin ETF by January 10. It is notable that Canadian spot ETFs have been utilizing the cash-create model for several years.

However, the fate of Franklin’s spot Bitcoin ETF application remains uncertain. With no recent updates on the application, Seyffart anticipates a delayed order in the near future. The SEC initiated discussions on various ETF applications in late September, addressing concerns related to market manipulation and surveillance-sharing agreements.

As the deadline for ARK Invest’s spot Bitcoin ETF application approaches on January 10, 2024, market participants eagerly await the SEC’s decision on the much-anticipated approval or rejection of a spot Bitcoin ETF in the early months of next year.

Bitcoin Price Spike

Following the release of this news, the value of Bitcoin experienced a rapid increase of $800, surging from approximately $36,000 to $36,800 within a matter of minutes.

BTC 1D graph coinmarketcap 4
Source: CoinMarketcap

As of now, the current price of BTC is $36,444, and it boasts a 24-hour trading volume of $77.37 billion. Bitcoin’s market capitalization is noted at $712.32 billion, maintaining a market dominance of 51.22%. Over the past 24 hours, BTC’s price has experienced a slight uptick of 0.17%.

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