What's driving the Bitcoin price surge?

Cryptocurrencies are gaining more traction among institutional investors.

| More on:
A photo of a blue graphic in the background with a white upwards arrow and a gold bitcoin being held in front of it

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Bitcoin (CRYPTO: BTC) investors have enjoyed a strong week, with more gains coming in over the past 24 hours.

One Bitcoin is currently worth US$49,400 (AU$67,670). That's up 4% since this time yesterday and up 16% over the past full week.

That puts its market cap back close to the trillion dollar mark, currently at US$931 million.

Ethereum (CRYTPO: ETH), the world's number 2 crypto by market valuation, has been trending higher too. Ether is up 1% over the past 24 hours and 15% over the past 7 days.

Ethereum, and most other cryptos, often gain when Bitcoin goes up.

So, what's driving the recent surge in price for the world's biggest crypto?

US ETF rumblings

Crypto analysts are pointing to the increasing likelihood of the United States greenlighting a Bitcoin exchange traded fund (ETF) as a bullish signal for the digital token.

This week, United States Securities and Exchange Commission (SEC) Chair Gary Gensler indicated that crypto investors should be entitled to the same kinds of safety measures in place for traditional investments, like share markets.

That's particularly relevant with the total crypto market valuation is approaching the US$3 trillion mark.

One method Gensler mentioned to help regulate the crypto market and open the door to non-tech savvy investors is a US listed Bitcoin ETF. The current proposal still envisions one which invests in futures contracts, rather than holding the actual tokens, which many proponents prefer.

Nonetheless, analysts believe that even a futures-based ETF trading in US markets could be a big boon for Bitcoin.

Marcus Sotiriou, a sales trader at digital asset broker GlobalBlock told CoinDesk:

It would still open the floodgates for institutional adoption and hopefully result in a spot-backed ETF being approved in the not-so-distant future, which would allow ordinary people to include the asset easily [in their brokerage accounts].

Bitcoin's volatile price action

Though you may have banked 16% in virtual gains if you bought Bitcoin 7 days ago, don't lose track of the token's notorious volatility.

Investors who buy during the peaks and sell during the troughs are losing plenty of money.

In mid-April, for example, Bitcoin peaked at more than US$64,000. By late July it was down to US$29,800. And it has bounced around plenty since then.

Invest with care.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Cryptocurrencies

Blue and white Bitcoin logo.
Cryptocurrencies

How the Bitcoin price just smashed new all-time highs…again!

The Bitcoin price just leapt to new records. But why?

Read more »

Hand holding a Bitcoin with a rising arrow in front of a chart.
Cryptocurrencies

The Bitcoin price just broke a new record amid stock smashing year

Amid surging interest, Bitcoin has almost doubled investors’ money this past year.

Read more »

A smiling woman holds a Bitcoin token in her hand.
Cryptocurrencies

US$10,000 invested in Bitcoin 3 years ago is now worth…

Crypto investors have realised some outsized gains on their Bitcoin investments over three years.

Read more »

Man holding a calculator with Australian dollar notes, symbolising dividends.
ETFs

$10,000 invested in CRYP ETF a year ago is now worth…

This exchange-traded fund allows investors to gain exposure to cryptocurrency in a different way.

Read more »

Ethereum symbol in green.
Cryptocurrencies

Cryptocurrency comeback: Here's why Bitcoin and Ethereum are climbing again

Ethereum’s trading price has shot up 42.28% over the past month.

Read more »

Hand holding a Bitcoin with a rising arrow in front of a chart.
Cryptocurrencies

The Bitcoin price just leapt to new all-time highs. Here's why

The Bitcoin price just smashed through US$110,000. But what’s driving the rally?

Read more »

Bitcoin coins in a pile.
Cryptocurrencies

What's happening with the Bitcoin price amid the Trump tariff market panic?

You may have heard Bitcoin referred to as ‘digital gold’. But is it really a haven asset?

Read more »

A graphic picture of gold Bitcoins with the Bitcoin symbol lying on a desk with arrows shooting higher and one arrow lifting off the flat surface pointing to the sky.
ETFs

Dip your toes into cryptocurrency with these 2 ASX ETFs

Interested in cryptocurrency?

Read more »