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Bitcoin fell late Wednesday afternoon after the Securities and Exchange Commission gave the green light for the first-ever spot bitcoin ETFs to trade in the U.S., as expected.
The cryptocurrency’s price traded lower by about 2% at $45,786.34, according to Coin Metrics.
The approval has been one of the most widely anticipated events for crypto investors over the past few months. It’s regarded by many as a key catalyst for bitcoin and crypto broadly this year. The bull case is that it will bring a flood of new investors into the market.
Bitcoin’s price is up 77% since late August, when optimism began to build following Grayscale’s big legal win against the SEC over the regulator’s refusal to let it convert its popular Bitcoin Trust (GBTC) into an ETF.
The price of ether climbed 11% to its highest level since May 2022, as investors sold bitcoin on the long-awaited news and rotated into the second-largest cryptocurrency.
“It’s all about getting ahead of the narratives — bitcoin has rallied versus ether for the last six months thanks to spot ETF speculation, and ETF approval ties a bow on that narrative,” said Conor Ryder, head of research at the stablecoin company Ethena Labs. “Meanwhile ETH has struggled to find any momentum and has underperformed compared to most of the smaller Layer 1s like Solana.”
Other coins in the Ethereum ecosystem gained too. The token tied to Polygon gained 11%, Chainlink advanced 9% and Uniswap soared 14%.