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Bitcoin Stabilizes After Sharp 8% Drop Fails to Spook Investors

The leading crypto asset bounced off the $41,000 support as traders remained optimistic over the prospects for the first spot BTC ETF.

BTC gave investors and traders a scare, but now it seems that they can stop holding their breath.

Key Takeaways

  • Bitcoin price rebounds after hitting $41,000 as traders stay optimistic over ETF prospects.
  • The OG crypto has added 150% to its valuation this year, outperforming nearly all large-cap assets.

Investors Remain Unfazed 

Bitcoin, the original cryptocurrency, powered higher in early Wednesday deals after an 8% drop on Monday pushed the token to $41,000. As the regular session unfolded, Bitcoin was steadily making progress toward the $42,000 threshold, supported by the current narrative revolving around the spot Bitcoin exchange-traded fund.  

Presently, BlackRock, the world’s biggest asset manager, is in talks with the US financial watchdog, the Securities and Exchange Commissions. BlackRock has an active application for launching the first-ever spot Bitcoin ETF and markets are now pricing in its potential approval. 

If the SEC greenlights the filing, Wall Street will be able to invest directly into genuine Bitcoin, and not contracts futures tied to the asset, which is the current way to invest. In practice, this would mean that BlackRock will need to buy loads of Bitcoin in order to guarantee continuous liquidity for buying and selling.  

Bitcoin Stands Supreme 

Despite the sharp drop earlier this week, the price of Bitcoin is up a hefty 150% on the year. In other words, the rate of return for BTC is eclipsing nearly all large-cap assets. The S&P 500, in comparison, is up 21% for the same time span. The volatile stock of EV kingpin Tesla is higher by 115% year-to-date. 

With that said, keep an eye out for any BTC ETF-related news coming out early in 2024. Markets are bracing for increased volatility as a positive outcome could also mean that traders may either rush to take profits or ramp up their bets.