Bitcoin briefly peaks above $66,000, ether edges up as ETF anticipation builds

Bitcoin climbed above $66,000 at one stage on Tuesday night before retreating to around $65,757, as traders continue to weigh the impact of the German government’s and Mt. Gox’s transfers, as well as the news surrounding former U.S. President Donald Trump.

The world’s largest cryptocurrency traded up 1.94% over the past 24 hours, according to The Block’s price page. Ether also traded above $3,500 briefly tonight and is currently changing hands at around $3,487, up 0.78% in the last 24 hours.

“We’re seeing the conversion of multiple factors, all supporting prices… for now,” Justin d'Anethan, head of APAC business development of crypto market maker Keyrock, told The Block, adding that a key factor was the failed assassination attempts on Trump at a rally over the weekend. 

“Traders are undoubtedly thinking two steps ahead: with predictions markets shooting up for Trump’s odds to win the 2024 elections, one would assume a supportive policy for markets and the economy, along with pressure on the central bank to lower rates, which ultimately is bullish for risk assets and so include crypto,” d'Anethan added. “This is even without accounting for the favorable crypto view touted by Trump and his new running mate senator J.D. Vance.”

Earlier this week, Trump selected Vance as his running mate for the upcoming presidential election. Vance is widely known as a pro-crypto figure who supported the repeal of the SAB121 bill and holds over $100,000 worth of bitcoin. Min Jung, an analyst of Presto Research, said that Trump’s nomination of Vance has “positively impacted the market sentiment.” 

Meanwhile, the German government’s sale of confiscated bitcoin holdings and concerns over Mt. Gox's imminent bitcoin payout largely contributed to last week's market dip. However, it appears that the German government has finished selling off its bitcoin. “The wallet seems to be emptied now and so one would assume the selling pressure has been relieved,” d'Anethan said.

Mt. Gox, on the other hand, has continued to move billions of dollars worth of bitcoin ahead of the impending creditor payouts. “The impact of Mt. Gox transfers appears to be overstated relative to the actual impact on the market,” said Jung of Presto Research.

“Traders and funds are becoming increasingly bullish on BTC as the German government completes its sales of their large holdings while Mt Gox distributes funds to creditors, leading to less expected sell pressure in the long term,” said Nick Ruck, head of growth at BitU Protocol.

Anticipation for ether ETFs

Crypto investors are also closely watching ether movements amid news that spot Ethereum exchange-traded funds will likely begin trading on July 23, as sources confirmed with The Block earlier this week.

“The imminent trading of ETH ETFs by large asset managers in the U.S. and on the American stock exchange, and of course the assumption that more ETFs with more crypto-linked products are to come, are supportive,” d'Anethan said.

Also, a short squeeze could be another driver for bitcoin's rebound, said Alvin Kan, COO of Bitget Wallet. “The market previously experienced a panic-induced decline, leading to an accumulation of BTC short positions. The rapid rise in BTC caused losses and liquidations of these short positions. If BTC breaks through $68k, an additional $800 million in short positions could be liquidated,” Kan added.

Update: Added additional comments on markets