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5 Favorable Events Bitcoin Had in 2023: ETFs in Focus

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Bitcoin, the world's first and most well-known cryptocurrency, has seen its fair share of ups and downs since its inception. In 2023, the cryptocurrency landscape witnessed several significant events that have contributed to about 64.9% year-to-date gains in the key crypto currency. Let’s find out the factors that drove the otherwise volatile currency so far this year.

Landmark Legal Victory for Bitcoin ETFs

One of the most significant developments in 2023 for the Bitcoin ecosystem was the legal victory in the U.S. Court of Appeals for the D.C. Circuit, involving Grayscale and the U.S. Securities and Exchange Commission (SEC).

The court sided with Grayscale in its lawsuit against the SEC's denial of the company's application to convert the Grayscale Bitcoin Trust into an ETF. This decision is not only a win for Grayscale but also sets an example that could impact other companies seeking to launch Bitcoin ETFs, including industry giants like BlackRock and Fidelity.

Before this in July, Coinbase’s arguments in its legal case against the SEC were strengthened after a key court ruling went partially in favor of cryptocurrency firm Ripple (read: 9 Best ETFs of Winning Investing Area of Last Week – Crypto).

Blackrock, WisdomTree and Invesco Plan to Launch Bitcoin ETFs

In past few weeks, we have seen the filing of spot ETF applications by renowned asset managers, which fueled a growing interest in cryptocurrencies from institutional and corporate clients. While the SEC has been in denial for a Bitcoin ETF for long, the filings represent a significant step towards widespread adoption. The world’s largest asset manager BlackRock’s plans to launch a bitcoin ETF in June influenced the entire space. Two other large investment firms now joined the queue, WisdomTree and Invesco.

Traditional Finance Giants Explore Crypto Space

Renowned financial institutions, including Charles Schwab, Fidelity, and Citadel Securities, have partnered to launch EDX Markets, a crypto exchange platform. EDX Markets, which had earlier faced delays due to regulatory uncertainty, has finally listed major cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

Institutional Adoption

Institutions such as JPMorgan and Goldman Sachs, which were against virtual currencies before, have started implementing them into their systems. This is a sign of growing acceptance among institutional investors.

Positive Outlook for Bitcoin Mining Companies

Bitcoin mining stocks are well-positioned for growth. Mining companies have been making expansion moves, increasing their hash rates, and planning to acquire more mining machines. Such companies include Hut 8 Mining, Riot Platforms and Cleanspark. In fact, bitcoin hash rate hit a new all-time high in mid-2023 amid weakening prices.

Will Bitcoin Gain Further as Having Expected in 2024?

Halving events, which occur about every four years, lower the mining rewards by half. The resulting shortage of newly mined BTC has historically played a crucial role in driving price rallies. As the having event looms in 2024, traders are tightening their belts for a new cycle. So, there is high chance of an upward momentum for Bitcoin.

Favorable Regulations in the Cards?

Though the SEC’s stance toward cryptocurrency has been adverse so far, back-to-back efforts in launching an ETF from reported issuers stirred speculation that such intuitional initiatives might compel legislative institutions to figure out how to classify and regulate them.

Notably, a bitcoin ETF would allow investors to gain exposure to Bitcoin's price movements without the need to directly own the cryptocurrency. This development is seen as a potential catalyst for broader institutional adoption of Bitcoin and could make it easier for traditional investors to participate in the crypto market.

Investors should also note that cryptocurrencies are being promoted as an eco-friendlier investment. Sustainability concerns are in vogue lately as the global investing world is concerned about climate change.

Against this backdrop, following are the regular ETFs on this concept that may win in the near term.

ETFs in Focus

VanEck Digital Transformation ETF (DAPP - Free Report) – Up 157.5% YTD

Global X Blockchain ETF (BKCH - Free Report) – Up 136.5% YTD

Valkyrie Bitcoin Miners ETF (WGMI - Free Report) – Up 179.5% YTD

First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT - Free Report) – Up 82.3% YTD

Fidelity Crypto Industry and Digital Payments ETF (FDIG - Free Report) – Up 90.8% YTD

iShares Blockchain and Tech ETF (IBLC - Free Report) – Up 96.9% YTD



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