Bitcoin is approaching the 30,000 level again as optimism continues around Bitcoin spot ETFs

Bitcoin was able to record further gains this morning, as it crossed the 29450 level at approximately 3:00 AM GMT.

These gains come as markets remain optimistic, extending for about a week, about the possibility of approving the conversion of the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin exchange-traded fund (ETF), with the Securities and Exchange Commission (SEC) not filing an appeal against the court’s decision that obligated the authority to reconsider.

With its previous decision that prevented the launch of the first spot Bitcoin ETF.

Grayscale took a next step forward by amending its previous application to require the new fund to be registered under the Securities Act of 1933.

While this positive sentiment reinforced the buying wave for GBTC and pushed the discount from the net asset value to the lowest levels since 2021, at about 12.5%. It seems that investors are trying to take advantage of this relatively wide discount from the net asset value, as transferring GBTC to an ETF may eliminate this discount completely.

This could add $2 billion to investors, according to what analysts at JPMorgan estimated, who also expect to approve the launch of a number of spot Bitcoin ETFs during the first months of 2024.

Markets appear to be counting on the launch of Bitcoin spot funds to end the nearly two-year-long cryptocurrency winter. But I don’t think launching these funds could actually do that, at least in the long run.

The reality is not that simple, and the issue is not one-sided. Even with the launch of these funds, this will in no way mean sending Bitcoin to relatively imaginary levels immediately and sustainably.

All NASDAQ 100 components, for example, are held by major index funds (ETFs or mutual funds), such as Invesco QQQ and other large-cap ETFs and they are still getting hammered even more than Bitcoin. I think cryptocurrencies are still missing a lot so far, most notably certainty about the future of the regulatory and legislative environment and restoring confidence in the sector.