Bitcoin Takes Aim at 2023 Peak as Dominance Puts in 2-Year High

As we approach the final week of ‘Uptober’, BlackRock’s tireless journey towards a Bitcoin ETF has set the crypto market ablaze with excitement! 

After some unexpected “fake news”, and an amended prospectus, a subsequent resurgence in ETF optimism has resulted in the price of Bitcoin soaring back above $30,000.

Alongside this, the legal battle between Ripple and the SEC took a surprising twist, with dropped charges resulting in a clear score of 3-0 in favor of Ripple. 

And in the midst of it all, BlackRock CEO Larry Fink hinted at crypto’s potential role as a “flight to quality.”

Let’s dive in.

Bitcoin dominance climbs to 2-year highs

As Bitcoin pushes on toward 2023 year highs, Bitcoin’s dominance has achieved a remarkable two-year high, surpassing 52%, as shown by TradingViews BTC.D chart.

This resurgence, marked by a peak at 52.72% on October 21, is a milestone not witnessed since April 2021.

From an early-year figure of 38%, Bitcoin’s dominance has seen a substantial rise in parallel with an 81% increase in Bitcoin’s price since January. 

Experts point to high inflation rates, geopolitical unrest, and a fragmented US government as motivating factors driving investors to adopt risk mitigation strategies.

In the last week, the impending approval of a spot Bitcoin ETF has also been a pivotal factor in enhancing Bitcoin’s attractiveness. 

The current upswing in dominance signifies not only Bitcoin’s stake in the total cryptocurrency market value but also its current supremacy over alternative cryptocurrencies.

Investors are now waiting to see if Bitcoin can breach the top of its current trading range at $31,000.

Test run for BlackRock Spot Bitcoin ETF approval

If we weren’t sure how the market was going to react to the approval of a BlackRock Spot Bitcoin ETF – we do now!

To say the crypto market was excited last Monday is probably an understatement. 

According to a tweet released by Cointelegraph, BlackRock’s Bitcoin ETF had been approved.

Unfortunately, the crypto market was hit with a ‘fake news’ curveball.

According to an official apology from Cointelegraph, “the news lead originated from an unconfirmed screenshot posted by an X user who claimed it was from the Bloomberg Terminal.”

Despite the sharing of inaccurate information, the excitement proved one thing – the market is bullish on Bitcoin Spot ETF approval news.

As the alleged approval news proliferated the markets – even reaching the terminals of Bloomberg – the price of Bitcoin soared to $30,000 in the space of 8 minutes. 

Those within the crypto community were quick to point out that the market cap of Bitcoin spiked by 50 million.

Despite falling shortly afterward, the precedent has now been set.

However, according to a brand new report released by analytics firm, CryptoQuant, the spike in market cap witnessed last week might pale in insignificance when compared to what the market cap might reach if Bitcoin ETFs are eventually approved.

According to the report, based on the total assets under management of key Bitcoin Spot ETF applicants, CryptoQuant expects $150 billion to flow into Bitcoin once ETFs are approved.

Thanks to historical charts depicting the difference between Bitcoin’s market cap and realized market cap (the total market cap of all Bitcoin in existence as purchased by the owner), CryptoQuant predicts that for everyone $1 entering the Bitcoin market, the market cap would increase by $3-$5: a ratio that has been witnessed previously. 

Given this relationship, if $150 billion were to flow into Bitcoin, CryptoQuant state that the market cap of Bitcoin could expand between $450-$900 billion: a market cap increase that would result in the price of Bitcoin settling between $50K and $73K. 

Ripple 3 – SEC 0

In the ongoing legal saga involving Ripple Labs, the SEC has decided to drop claims against two key figures in the Ripple camp. 

The lawsuit, which alleged that the blockchain company had violated U.S. securities law, took an unexpected turn last week as the SEC announced via court filing that they had opted to clear Ripple Chief Executive Brad Garlinghouse and co-founder Chris Larsen of aiding and abetting sales of the cryptocurrency XRP. 

The legal battle began in December 2020 when the SEC accused Ripple of illegally raising over $1.3 billion through an unregistered securities offering involving XRP. 

The heart of the matter was whether the XRP tokens constituted securities, which triggered an intricate legal debate.

U.S. District Judge Analisa Torres, presiding over the case, delivered a partial victory to Ripple in July, asserting that the sales of XRP on public exchanges did not amount to unregistered securities offerings. 1-0 to XRP.

However, the dropped charges against Garlinghouse and Larsen, related to their alleged role in these sales, have undoubtedly moved the score to 3-0 in favor of Ripple. 

As news of the SEC’s withdrawal broke on Thursday, the price of XRP skyrocketed to $0.52.

It has remained at this level throughout the weekend and is now waiting for a push beyond the next key technical levels of the 200-day and 200-week moving averages.

The case now enters a phase where both sides will present arguments to the judge to determine the appropriate penalty for Ripple.

Bitcoin: a flight to quality

In the quest for Bitcoin ETF approval, BlackRock has once again amended its prospectus for a spot Bitcoin exchange-traded fund (ETF) application with the SEC. 

BlackRock, the world’s largest asset manager, initially filed its spot Bitcoin application under the title “iShares Bitcoin Trust” on June 15, 2023. 

In July, they refiled to incorporate a surveillance sharing agreement with their custodian, Coinbase, and Nasdaq, signaling their commitment to regulatory compliance.

Notable changes in BlackRock’s latest filing revolve around the acknowledgment of intense competition within the Bitcoin ETF arena, and the pricing details of their ETF. 

These collective amendments are seen by experts as positive steps and solid progress towards the ultimate approval of a Bitcoin ETF.

During the following 24 hours, the price of Bitcoin increased by 5%.

Alongside BlackRock’s amendments, optimism was further boosted by the CEO, Larry Fink, who earlier in the week stated that crypto had become a “flight to quality.”

In an interview with Fox Business, Fink stated “I think there are more people running into a flight to quality whether that is in treasuries, gold, or crypto, depending on how you think about it. And I believe crypto will play that type of role as a flight to quality.”

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