Helped in part by U.S. election results, bitcoin surged in November. As of late November 29, the largest cryptocurrency was flirting with a monthly gain of almost 40% — an astounding ascent considering the digital assets previous year-to-date bullishness.
That rally has benefited the WisdomTree Bitcoin Fund (BTCW ), which was among the spot bitcoin exchange traded funds that launched in the U.S. in January. Bitcoin’s 2024 rally was fueled in part by advisors, other professional investors and retail market participants embracing the spot ETFs. It has powered BTCW to $363.1 million in assets under management.
That’s impressive work in 11 months. And BTCW’s heft could increase to close out 2024 and into 2025, assuming bitcoin extends its bullish ways. That’s possible, particularly if the cryptocurrency is able to break through the psychologically important $100,000 level.
Speaking of Bitcoin at $100,000 …
As of late November 29, bitcoin traded north of $97,400. This was slightly below its record highs, which are below the much ballyhooed $100,000 level. However, there are interesting developments on that front. On November 29, CME-listed bitcoin futures traded above $100,000 for the second time in week. This stoked speculation as to when the spot price will follow suit.
Bitcoin spot prices are material to investors considering BTCW. That’s because the ETF is linked to those prices, not bitcoin in the futures market. Each time bitcoin has recently flirted with $100,000 in the spot market, there’s been evidence of profit-taking. That’s reasonable to expect. If the cryptocurrency moves through that level with some intensity, the rally from there could be significant, lifting ETFs such as BTCW in the process.
“Despite the CME BTC futures hitting $100,200 and Bitcoin’s spot price making an effort to achieve the same result, consistent selling near the six-figure market continues to hamper the effort,” reported CoinTelegraph.
Short Covering Could Play a Role
For now, BTCW and friends — and bitcoin itself — likely need traders to push the digital currency back to $99,000. That price point is important. That’s not only because of its proximity to $100,000. It’s also an area at which some traders could be forced to cover bearish futures positions. That short covering could play a role in pushing spot bitcoin prices over $100,000.
“Given the robust selling near $100,000, data from CoinGlass suggests that bulls will need to press Bitcoin’s price to $99,000 to trigger the next liquidation cascade that could generate the force needed to take BTC spot price above $100,000,” according to CoinTelegraph.
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