While it’s too early to talk about a speculative cryptocurrency rally like the ones Bitcoin (BTC) has historically offered, something is definitely going on. Just yesterday (Monday), the price of the oldest cryptocurrency surged by 15%, testing its highest levels since May 2022, or in 17 months.

Along with the rising price, investor expectations and dreams are also soaring, with some already mentally cashing in above-average profits. The fear-of-missing-out (FOMO) sentiment is also making a definitive comeback in the bull market.

During Tuesday’s Asian trading session, Bitcoin momentarily tested the $35,200 level, the highest this year and the highest since May last year. Although the price has slightly retreated since then, Bitcoin still remains above the $34,000 level, breaking out of the consolidation it had been in for over a year.

Moreover, technical indicators suggest that bulls are in control for the first time in a while. Not only has Bitcoin’s price seen a significant increase, but its “dominance,” or total share in the market capitalization of all digital assets, has also risen. On Tuesday, it reached 52%, the highest since April 2021.

The price of Bitcoin (in blue) and market dominance (in orange). Source: Tradingview.com.

The price of Bitcoin (in blue) and market dominance (in orange). Source: Tradingview.com.

Meanwhile, trading volumes exploded, reaching nearly $30 billion in 24 hours, and Bitcoin futures funding rates hit record highs, indicating panic buying from investors wanting to get a piece of the action. The full-blown FOMO has returned to the markets.

Even though the Relative Strength Index (RSI) indicates that Bitcoin is “significantly overvalued,” Twitter is filled with posts competing in forecasts about how far the cryptocurrency’s price will go.

Bitcoin 45,000 – FOMO is hitting the Market

👇 1/12 The Bitcoin futures funding rate is exceptionally high, indicating that many traders are panic buying at current levels – FOMO is back. Bitcoin dominance has reached 52.1%, and volumes are exploding as Bitcoin trades $29bn… pic.twitter.com/CKtkAPEhhk

— DeFi on Target (@DeFiOnTarget) October 24, 2023

“The current optimism surrounding the leading cryptocurrency can be largely attributed to insights provided by a Morgan Stanley report, suggesting that the so-called ‘crypto winter,’ which has concerned investors, might be approaching its end,” commented Walid Koudmani, the Chief Market Analyst at XTB.

While Koudmani is likely correct, it’s not the only reason for the gains.

Bitcoin ETF Reignites Investor Imagination

We all remember how the news that BlackRock would apply to create the first spot Bitcoin ETF triggered euphoria in the cryptocurrency markets just a few months ago. Now, speculation about the imminent approval of this financial instrument has once again captured investors’ imagination.

BlackRock has taken another step toward launching a spot ETF product and has begun the “seeding” process. As Eric Balchunas from Bloomberg admitted, this is usually a good sign that brings the ETF closer to launch.

Note: Seeding is typically not a lot of money just enough to get ETF going. So I wouldn’t read this as ‘omg Blackrock is buying a ton of bitcoin’ at all but more the fact they doing it and disclosing it shows another step in the process of launching.

— Eric Balchunas (@EricBalchunas) October 23, 2023

Additionally, the planned BlackRock iShares Bitcoin Trust has been listed on the Depository Trust & Clearing Corporation (DTCC), which clears NASDAQ trades. The instrument will be available under the symbol IBTC.

The iShares Bitcoin Trust has been listed on the DTCC (Depository Trust & Clearing Corporation, which clears NASDAQ trades). And the ticker will be $IBTC. Again all part of the process of bringing ETF to market.. h/t @martypartymusic pic.twitter.com/8PQP3h2yW0

— Eric Balchunas (@EricBalchunas) October 23, 2023

Bitcoin to Become a $900 Billion Market

The news has gone viral across the broad market of digital assets, influencing the price of Ethereum (ETH), the second-largest cryptocurrency by market capitalization, to reach its highest levels since August. One ETH is currently trading hands for over $1,800. In after-hours trading, shares of cryptocurrency companies like Coinbase and MicroStrategy are also seeing strong gains. Additionally, the stock prices of cryptocurrency miners have shot up; for example, Hut 8 has increased by over 12%.

“The total cryptoasset market will grow by $1 trillion if the bitcoin spot ETF gets approval, data analytics firm CryptoQuant has claimed,” eToro commented in today’s note. “The firm has estimated that if the issuers that have applied to list bitcoin ETFs put just 1% of their Assets Under Management into the ETF, circa $155 billion could enter the market.”

This would elevate Bitcoin’s market capitalization by nearly one-third, pushing it to a valuation back to $900 billion.

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