The crypto market witnessed a significant rally across key digital assets on Thursday, with Bitcoin and Ethereum leading the charge. This surge wasn’t random—it was fueled by mounting anticipation around a pivotal regulatory milestone: the potential approval of the first U.S.-based spot Bitcoin ETFs.
As of 1:00 p.m. ET, Ethereum (ETH) surged 6.9%, while Bitcoin (BTC) reclaimed the $37,000 mark, climbing over 3% to hit an 18-month high. Interestingly, not all major cryptocurrencies rode the wave—Dogecoin (DOGE) dipped around 5% despite a strong 13% weekly gain prior to the session. This divergence highlights how market sentiment is increasingly tied to institutional developments rather than broad speculative momentum.
A Rally Months in the Making
This week’s price action is best understood as the continuation of a broader rally that began roughly three weeks ago. The catalyst? A landmark legal victory for Grayscale Investments.
In August, a federal court ruled in favor of Grayscale, overturning the SEC’s denial of its application to convert the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. The U.S. Court of Appeals for the D.C. Circuit upheld that decision, putting pressure on the SEC to reconsider its longstanding resistance to spot ETF approvals.
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This legal precedent reshaped market expectations. In response, major financial institutions—including BlackRock and Fidelity—filed updated registration statements for their own spot Bitcoin ETF proposals. The message was clear: Wall Street is ready, and the crypto market responded accordingly.
The First Approval Window Has Opened
According to a recent research note by Bloomberg ETF analysts Eric Balchunas and James Seyffart, Thursday marked the beginning of an eight-day window during which the SEC could theoretically approve one or more pending spot Bitcoin ETF applications.
While no immediate announcement is expected, this period symbolizes a critical shift—from uncertainty to active regulatory consideration. The SEC has not confirmed any approvals, but signs point to progress. CoinDesk reported that the SEC’s Divisions of Corporate Finance and Trading & Markets have initiated discussions with Grayscale regarding its conversion application.
Although the agency declined to comment publicly, these behind-the-scenes conversations signal that the review process is advancing beyond procedural delays and into substantive evaluation.
Why Simultaneous Approvals Are Likely
Despite the opening of this approval window, investors should temper expectations for a sudden announcement this week. The SEC is not required to act until January 10, 2024, the deadline for responding to ARK Invest’s “21Shares” Bitcoin ETF application.
However, experts believe the SEC will avoid approving a single ETF in isolation. Doing so could give one issuer an unfair first-mover advantage, disrupting market fairness and inviting legal challenges. Instead, regulators are expected to approve multiple applications at once—likely including filings from Grayscale, BlackRock, Fidelity, and others—to ensure a level playing field.
Balchunas and Seyffart maintain a 90% probability of approval by January 10. If realized, this would mark a watershed moment for digital assets in traditional finance.
The Transformative Impact of Bitcoin ETFs
So why does the market care so much about spot Bitcoin ETFs?
For millions of investors, direct crypto ownership remains inaccessible or unappealing due to complexity, security concerns, or brokerage restrictions. ETFs solve this by offering exposure through familiar channels—standard brokerage accounts—without requiring wallets, private keys, or exchanges.
Unlike futures-based Bitcoin ETFs (which track derivatives), spot ETFs hold actual Bitcoin, providing direct price exposure. This authenticity boosts investor confidence and aligns incentives more closely with underlying asset performance.
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Analysts at CryptoQuant estimate that approved spot Bitcoin ETFs could funnel over $1 trillion into the broader crypto market. With trillions in institutional capital already invested in traditional ETFs, even a small allocation shift toward Bitcoin could generate massive inflows.
Moreover, ETF approvals would validate Bitcoin as a legitimate asset class in the eyes of regulators, pension funds, and mainstream investors—potentially triggering a long-term revaluation of digital assets.
Could This Be a “Sell the News” Event?
History shows that major catalysts can sometimes lead to short-term price reversals—a phenomenon known as “sell the news.” Once anticipated events occur, traders who bought in anticipation may take profits, causing temporary dips.
However, many analysts argue this time could be different. Unlike speculative rallies driven by hype, the current momentum is underpinned by structural change: regulatory clarity and institutional adoption.
Even if prices pull back post-approval, the long-term trajectory appears bullish. The real value lies not in the event itself, but in the sustained access it unlocks for global capital.
Frequently Asked Questions
What triggered today’s cryptocurrency rally?
The surge was primarily driven by renewed optimism around the potential approval of spot Bitcoin ETFs in the U.S., particularly following reports of active SEC engagement with Grayscale and the opening of a theoretical approval window.
Why did Dogecoin drop while Bitcoin and Ethereum rose?
Dogecoin often behaves differently from core cryptocurrencies like Bitcoin and Ethereum due to its higher volatility and community-driven dynamics. Its recent dip may reflect profit-taking after strong gains earlier in the week, rather than broader market trends.
What is a spot Bitcoin ETF?
A spot Bitcoin ETF directly holds Bitcoin as its underlying asset, allowing investors to gain exposure without owning or storing the cryptocurrency themselves. It trades like a stock on traditional exchanges.
When will the first Bitcoin ETF be approved?
The next key deadline is January 10, 2024, for ARK Invest’s application. While approval could come earlier, most experts expect decisions around or shortly after that date.
Will only one Bitcoin ETF be approved?
Unlikely. To maintain fairness and prevent market distortions, regulators are expected to approve multiple spot Bitcoin ETFs simultaneously from various providers.
How could ETFs impact Bitcoin’s price long-term?
By opening floodgates for institutional investment, ETFs could significantly increase demand for Bitcoin. Analysts project potential inflows that might add over $1 trillion to the total crypto market capitalization.
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Final Thoughts
The recent rally in major cryptocurrencies reflects more than just short-term speculation—it signals growing confidence in the maturation of digital assets within the global financial system. Regulatory milestones like spot Bitcoin ETF approvals don’t happen overnight, but when they do, they reshape investment landscapes.
While challenges remain and timing is uncertain, the path forward is clearer than ever. For investors watching from the sidelines, now may be the time to understand how these developments could unlock new opportunities in one of the most transformative asset classes of the 21st century.
Keywords: Bitcoin ETF, spot Bitcoin ETF, cryptocurrency rally, SEC approval, Grayscale Bitcoin Trust, Ethereum price, crypto market, Bitcoin price