Bitcoin rose to its highest since May 2022 of $35,280 before easing slightly. The latest rally comes as hype around a spot Bitcoin ETF ramps up with the listing of BlackRock's iBTC on the Depository Trust & Clearing Corporation (DTCC) website. After the rapid ups and downs of being listed, delisted and then relisted on DTCC, Bitcoin's upward momentum continues as it is often considered an important step before the ETF is officially approved.

Source: TradingView

Although Bitcoin price has retraced from 35,000 #USD , the reason for the price movement this week could be a hint about the sustainability of the rally.

Institutional interest in Bitcoin

Despite many macro headwinds, the listing of BlackRock's Bitcoin spot ETF on a Nasdaq trade clearing firm appears to be the main catalyst driving Bitcoin's rise to $35,280 for the first time in more than a year.

Source: DTCC

Despite the revision to the Bitcoin spot ETF in mid-October, the BlackRock iBTC fund is the first to be listed by the clearing firm.

To date, the SEC has refused to approve a spot Bitcoin ETF despite numerous candidates including BlackRock, Fidelity, ARK Invest, and 21Shares having applied for approval three times. On October 14, Grayscale scored a major victory after the SEC announced that it would not appeal the decision of U.S. Court of Appeals Judge Neomi Rao. Following the ruling, Grayscale filed an application for a new #Bitcoin spot ETF on October 19.

What does a spot ETF mean for BTC?

Analysts continue to speculate how the approval of a spot Bitcoin ETF could affect BTC prices. The approval could create new demand worth $600 billion, according to the report. CryptoQuant believes that ETF approval will result in Bitcoin's market capitalization increasing by $1 trillion.

On October 24, Galaxy Digital published a report suggesting that once a Bitcoin ETF is approved, BTC could see a minimum inflow of $14.4 billion in the first year, rising to 38.6 billion USD in the third year.

Assumed Bitcoin cash flow after ETF approval. Source: Galaxy Digital

Charles Edwards, founder of Capriole Investments, also said that gold broke out of the bear market to generate 350% returns after the Gold ETF was approved.

Bitcoin Liquidations and CME OI Soar

Coinciding with Bitcoin's price rise, exchanges continue to see an exodus of BTC. The market sees coins leaving cryptocurrency exchanges as a bullish signal, as traders often withdraw their BTC when they want to keep it for long-term self-custody.

With Bitcoin continuing to leave exchanges, liquidations tend to have a strong impact on prices. In the last 24 hours alone, over $181.3 million in BTC shorts were liquidated with over $4.5 million in shorts liquidated in a 1-hour time frame.

Source: Coinglass

Glassnode describes the recent high number of liquidations as an “augmented short-squeeze.”

After a “Short-squeeze boost,” Bitcoin futures OI (open interest) reached 100,000 BTC on the Chicago Mercantile Exchange (CME) for the second time in history. The last time CME Bitcoin OI reached 100,000 BTC was November 22, 2022.

Bitcoin OI on CME. Source: Coinglass

Bitcoin's strength is helping to boost market sentiment. The Bitcoin Fear & Greed Index shows the market has turned from fear to greed, up 22 points in a month.

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