On February 8, the Bitcoin price surged from $3,337 to $3,711, by more than 11 percent.
Several hours prior to the abrupt increase in the price of Bitcoin (BTC), Robert J. Jackson Jr., a commissioner at the U.S. Securities and Exchange Commission (SEC) stated that eventually, a Bitcoin exchange-traded fund (ETF) is likely to be approved.
“Eventually, do I think someone will satisfy the standards that we’ve laid out there? I hope so, yes, and I think so,” Jackson told Roll Call in an interview.
While analysts consider the positivity of commissioner Jackson towards the potential approval of a Bitcoin ETF in the long run as one of the fundamental factors that contributed to the rally of BTC, it is not acknowledged as the main factor of the price surge.
Bitcoin ETF Prospect is Optimistic But Hard to Claim it Caused BTC to Surge
Throughout the past year, Hester Peirce, a pro-crypto SEC commissioner, has been the only key figure at the commission to support the idea of introducing an ETF for Bitcoin to increase the exposure of the asset to the mainstream.
However, Peirce consistently emphasized that investors should not wait on the SEC approving a Bitcoin ETF because it may take days or years.
In mid-2018, following the rejection of the Winklevoss Bitcoin ETF, commissioner Peirce stated that BTC is mature enough to have an ETF, adding that to protect more investors, the asset class has to be institutionalized.
“In addition, I am concerned that the Commission’s approach undermines investor protection by precluding greater institutionalization of the bitcoin market. More institutional participation would ameliorate many of the Commission’s concerns with the bitcoin market that underlie its disapproval order.”
In the minds of many investors, despite the efforts put in by pro-crypto and forward-thinking government officials like Peirce, the prospect of a regulated BTC investment vehicle being launched in the U.S. has been acknowledged to be highly unlikely.
As such, Commissioner Jackson’s statement on his belief that a Bitcoin ETF will ultimately get approved in the long-term sparked optimism in the space. It also certainly may have affected the price trend of the asset.
Alex Krüger stated:
“On the fundamentals side, SEC commissioner Jackson hinting towards eventual support for a Bitcoin ETF is big. On the technicals side, once BTC moved above $3450, it turned into a classic squeeze. Zooming into an intraday chart allows to observe the latter.”
However, several cryptocurrencies like Litecoin were already increasing in value prior to the movement of BTC.
Although the bear market has allowed a handful of digital assets to move independently from the rest of the market, still the majority of cryptocurrencies are intertwined with each other in terms of price to a large extent.
Technical Factors More Likely
It is difficult to say that the fundamental factors of Bitcoin triggered alternative cryptocurrencies to surge in value in this specific case because other digital assets began to recover first before BTC.
— Flood [Deribit] (@ThinkingUSD) February 8, 2019
Moreover, many traders had predicted the price of BTC to recover in the short-term due to various technical indicators that signaled a corrective rally.
Technical factors are said have had a stronger impact on the price trend of BTC in the past 12 hours over fundamental factors.
Featured Photo by Joshua Earle on Unsplash