Bitcoin has jumped as much as 9% on the day as other cryptocurrencies also began to surge. But what is driving the jump in price?
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Recently the Chairmen of the SEC, Gary Gensler, has been speaking favorably about a Bitcoin ETF. On Wednesday, Gensler voiced support for Bitcoin futures ETFs saying that these types of ETFs that invest in futures under the Investments Company Act of 1940 give higher investor protections than many existing options.
The so-called ‘40 Act “provides significant investor protections. I look forward to staff’s review of such filings.”
On September 29th the SEC issued a statement that they would be extending the deadline for the approval of Bitcoin ETF applications by 45 days. This was a sign that the regulatory body is finally looking into Bitcoin ETFs more closely instead of brushing them off.
Cryptocurrency investors have long awaited the moment that an ETF-like product would emerge in the United States. Such products already exist in Canada and supporters argue that they allow for a safer entry into Bitcoin and crypto exposure for the less tech-savvy and that those used to traditional securities markets would feel more familiar.
Gary Gensler’s support for these products and news that the SEC is evaluating current applications may have sparked fresh hope in investors’ eyes.
Stock-to-Flow Model Still On Track
Bitcoin’s stock-to-flow pricing model that was first introduced by a pseudonymous internet user by the name of PlanB, is still on track to hit its predicted price of $135,000 by December.
His model predicts Bitcoin’s price as its supply becomes more and more locked up in wallets while fewer Bitcoins are minted every four years, creating a low flow of fresh Bitcoin entering circulation.
PlanB’s predictions have been spot on for the close of the last two months and PlanB has given a price target of $63,000 for October. Not only that, but the pricing model of stock-to-flow has largely been accurate since it was first introduced.
Crypto enthusiasts and newcomers alike have likely taken notice, attributing to the price increase starting in October.
Federal Reserve Won’t Ban Bitcoin
On Thursday the Chairman of the Federal Reserve, Jerome Powell, said that the Central Bank has no intention of banning Bitcoin during a hearing with the House Committee on Financial Services.
Rep. Ted Budd of North Carolina asked Powell if the Federal reserve had any desire to ban cryptocurrencies. Powell responded saying that they do not, but that stablecoins could be subject to more regulatory oversight.
“No, no intention to ban them, but stablecoins are like money market funds, they’re like bank deposits, but they’re to some extent outside of the regulatory perimeter. And it’s appropriate that they be regulated. Same activity, same regulation.”
While stablecoins could be subject to more regulation as they represent U.S. dollars, Powell’s comments on normal cryptocurrencies led to a bullish response from investors.