Cryptocurrency prices are ending an up week on a high note in New York as the market benefits from an incursion by traditional finance players while the U.S. government clamps down on leading pioneers of the digital-asset industry.
The value of all crypto tokens was about $1.25 trillion in the late afternoon, according to CoinGecko, up almost 12% for the week and 51% for the year. Market leader BitcoinBTC 0.0% (BTC) was quoted at $30,889, rising 2.5% over the previous 24 hours and 20% for the week, while No. 2 crypto ether (ETHETH 0.0%) edged up 0.8% to $1,901, bringing its seven-day gain to 14%.
Two forces seemed to be driving prices. First was the previous week’s announcement that BlackRockBLK +0.2%, the world’s largest asset manager, was seeking approval to list an exchange-traded fund (ETF) for spot-market bitcoin. The Securities and Exchange Commission had repeatedly refused to accept such funds, even though it allows futures-based ETFs, claiming the latter are less susceptible to market manipulation. BlackRock took steps to make its offering seem palatable to the SEC, but when a company that powerful puts in the effort to prepare a listing in a new category after multiple competitors were turned down, the idea’s time has probably come.
Evidence can be seen in the slew of smaller ETF sponsors that quickly followed in BlackRock’s wake by proposing their own spot bitcoin funds, including InvescoIVZ -1.1%, WisdomTree and Valkyrie Investments. Spot-market ETFs could broaden demand for bitcoin by offering the convenience of stock trading to the kind of investors who are hesitant to get involved with crypto wallets, seed phrases and the risk of hackers. Collective investment funds run by professional managers may be antithetical to the individualistic philosophy of many early digital-asset buyers—the kind who subscribe to the “not your keys, not your crypto” slogan—but that did not halt the week’s gains.
The other development supporting the market was the announcement that EDX, a cryptocurrency exchange for institutions, was opening for business. Backed by traditional-finance heavyweights including Charles Schwab, Citadel, Fidelity and Sequoia Capital, the exchange offers trading in four cryptos: bitcoin, ether, litecoin and bitcoin cash. It differs from entrenched competitors in operating on a noncustodial model that bars it from taking possession of the assets it lists.
