Bitcoin prices surged 12.7% from the previous week on Friday. On Wednesday, the cryptocurrency showed a seven-day gain of 33.5%, its best seven-day performance since February this year.
Ethereum also saw a rise of 9.7% weekly gain as of Friday, while dogecoin rose 13% last week.
Historically, the four the quarter has been good for bitcoin. In the fourth quarter of 2020, the coin surged about 170% from about $10,780 to $28,980. Bitcoin has had a positive month so far, rising above $55,000 on Wednesday for the first time since May.
The most likely cause of the recent rally are institutional inflows, as established players expect the SEC to approve the first bitcoin futures exchange-traded funds in the coming weeks.
SEC chairman, Gary Gensler, recent stated his support for a Bitcoin-backed futures ETF. The SEC is yet to approve this but experts expect the initiative to launch very soon.
Bitcoin futures contracts at CME Group CME were trading at a premium of up to 17% to the spot price when bitcoin reached its all-time high. The metric usually reflects institutional flows, as CME is the preferred avenue for institutions’ exposure to bitcoin.
Crypto trading firm QCP Capital wrote, ”the unusually large premium indicates an overwhelming amount of outright buying.”
Will Bitcoin continue to rise?
Some analysts expect the rise to continue. According to Anto Paroian, chief operating officer at crypto hedge fund ARK36, the uptrend that we see this week is different from the one a month ago, when bitcoin surpassed $50,000.
“There wasn’t enough strength in the markets to sustain a further rally,” Paroian said. The chief operating officer then added, “Bitcoin seems much better prepared for another big move upwards.”
However, some remain wary that the crypto market could see another dip similar to the fourth quarter of 2020.
Dan Morehead, CEO of asset manager Pantera Capital, shared his view that the “buy the rumor, sell the news” pattern may apply if the SEC approves a bitcoin-backed futures ETF.
The asset manager wrote in a report, “Will someone please remind [me] the day before the bitcoin ETF officially launches? I might want to take some chips off the table.”
Morehead also noted, in the report, that the Bitcoin market turned downward after CME listed Bitcoin futures in 2017. Morehead speculates that Bitcoin price swings should moderate as the market becomes broader.
