Bitcoin Price Continues To Rise, Expected To Break 50,000 US Dollars

Bitcoin, the world's largest crypto asset by market cap. (Photo; Doc. Pexels)

JAKARTA - The price of Bitcoin (BTC) continued to climb throughout late 2023. BTC had hit a record high above $44,000 on Wednesday, December 5. This increase was driven by the hope that the United States Securities and Exchange Commission (SEC) would soon approve a financial product called Bitcoin ETF spot, which would allow investors to participate in the crypto market without having to own Bitcoin directly.

Bitcoin ETF spot is a securities that tracks the price of Bitcoin in the spot market, which is the current price for immediate delivery. This product is different from Bitcoin ETF-based futures contracts, which were approved by the previous SEC, which tracks the price of Bitcoin in the derivative market, which is the price for future shipments.

The advantage of Bitcoin ETF spot is that investors do not need to take care of technical problems such as Bitcoin storage, security and custodials, which can be a barrier to traditional investors. In addition, Bitcoin ETF spots are also expected to increase liquidity, transparency, and efficiency of the crypto market, as well as reduce the risk of manipulation and fraud.

One of the companies applying for Bitcoin ETF spot is BlackRock, the world's largest asset manager, which manages assets worth 8.59 trillion US dollars (Rp133.3 quadrillion) by the end of 2022. BlackRock filed a request on June 15, 2023, and appointed Coinbase, the largest crypto exchange in the US, as a Bitcoin custodian for its products.

BlackRock's petition is considered an important step towards encouraging Bitcoin adoption among institutional investors, who are still skeptical of the credibility and stability of crypto. BlackRock is also not the only company targeting Bitcoin ETF spots. Several other companies, such as Ark Investment Management and Grayscale, have also made similar applications.

However, the approval of the Bitcoin ETF spot still faces challenges from the regulatory side. Until now, the SEC has not provided an official response to BlackRock's and other companies' requests, and still has until January 2024 to make a decision.

The SEC is also reportedly still questioning details of a joint surveillance agreement, aimed at controlling fraud and manipulation by regulating trading tracking mechanisms, clearing activities, and customer identities.

However, optimism remains raging among Bitcoin traders, especially in the options market, which is a derivative instrument that grants the right to buy or sell Bitcoin at a certain price and time.

Data from Deribit, the largest crypto options exchange, shows that there is significant open interest at the level of $50,000 (Rp775.9 million) for the call option, which gives the right to buy Bitcoin, which is due on January 26, 2024. This suggests that traders expect the price of Bitcoin to surpass $50,000 by then.

Will this hope come true? Only time will tell. What is certain is that Bitcoin ETF spot is a new opportunity for crypto investors to gain exposure to dynamic and profitable crypto markets, without having to face existing technical and regulatory barriers.