Bitcoin hits more than 1-year high amid BlackRock ETF excitement

Bitcoin, the world's largest cryptocurrency, hit a more than one-year high on Friday (June 23), capping a week of gains helped in part by BlackRock's plans to create a bitcoin exchange-traded fund (ETF) despite heightened US regulatory scrutiny on the digital asset sector.

BlackRock, the world's biggest asset manager, filed last week to launch iShares Bitcoin Trust, an ETF that would have Coinbase Custody as its custodian as well as offer institutional investors exposure to the cyptocurrency.

Crypto exchange EDX Markets, backed by investment firms Charles Schwab, Fidelity and Citadel Securities, also announced earlier this week that it will allow trading on some cryptocurrencies.

The moves have revived investor interest in cyptocurrencies, which have been in the doldrums after a series of crypto company meltdowns including the sudden collapse of exchange FTX late last year.

Compounding negative sentiment has been increased regulatory scrutiny, including the US Securities and Exchange Commission's move this month to sue crypto giants Coinbase Global and Binance, alleging violation of its rules. The pair deny the allegations.

Bitcoin has gained nearly 25 per cent in value since BlackRock's filing. It rose as high as US$31,458 (S$42,000) on Friday, the highest level since June 7, 2022, and was last up 3.29 per cent at US$30,872.

The dark clouds overshadowing crypto have lifted in recent days amid a burst of institutional interest," said Kate Laurence, general partner of Bloccelerate VC, which invests in crypto projects.

"The likes of BlackRock, Charles Schwab, Fidelity and Citadel throwing their hats into the crypto ring is hugely significant because it shows that institutions are very serious about the space - despite the recent regulatory crackdown."

Investors piled into cryptocurrencies when interest rates were low, pushing the market to a peak value of US$3 trillion in 2021. But they turned cautious as rates rose, with the value of the market now standing at around US$1.24 trillion, according to CoinGecko data.

Ethereum , the world's second-largest cryptocurrency, has risen more than 16 per cent since last week. It was up 1.63 per cent at 1,903.20 on Friday.

Some market-watchers said the SEC crackdown may be good for bitcoin, which is generally considered a commodity rather than a security, and therefore beyond the SEC's remit.

"The SEC lawsuit has created opportunities for robust, regulated players, so I'm cautiously optimistic that this BlackRock event will have some sustainability," said Doug Schwenk, CEO of Digital Asset Research.

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