In a thrilling start to October, the world of cryptocurrencies witnessed a remarkable upswing in prices. Bitcoin, the flagship digital currency, surged past the $28,000 mark, reaching levels not seen since mid-August. Simultaneously, Ethereum, the second-largest cryptocurrency, reclaimed the $1,700 threshold, driven by growing excitement surrounding the imminent launch of Ethereum exchange-traded funds (ETFs). However, crypto-related stocks, after initially rallying, retraced some of their gains as the day unfolded.
For crypto enthusiasts, October holds special significance, often dubbed "Uptober" in the crypto trading community. Historical data from Coinglass reveals that Bitcoin has only experienced two declines in October over the past ten years, consistently posting positive gains in the last four Octobers. Ethereum has similarly enjoyed a positive run in October for the past four years, already recording a 3.7% increase in value in 2023, trailing slightly behind Bitcoin's 5% monthly gain.
Bitcoin's surge beyond the $28,000 mark was met with enthusiasm, particularly because it had been stuck trading around the $26,000 range since mid-August. In September, Bitcoin experienced a 3.9% increase in value, outperforming the S&P 500 and marking its first positive September in seven years.
The exact catalyst for this sudden jump remains unclear. Still, market analysts speculate that the liquidation of short positions in the Bitcoin futures market may have contributed to the price surge. Approximately $104 million worth of Bitcoin short positions were liquidated during the week ending on October 1, according to Coinglass data, exerting upward pressure on Bitcoin's price. In the 24 hours leading up to Tuesday morning, an additional $40.5 million in Bitcoin short positions were liquidated.
On the Ethereum front, Bitwise Asset Management seized the opportunity and launched trading for two Ethereum futures ETFs. These ETFs, known as the Bitwise Ethereum Strategy ETF (AETH) and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP), began trading on the Chicago Mercantile Exchange. Ethereum's increasing popularity as a blockchain platform for various applications, with prominent brands like Nike, Starbucks, and PayPal adopting it, has added fuel to its rally.
Notably, other financial institutions also joined the Ethereum ETF bandwagon, with ProShares and VanEck launching their own Ethereum futures ETFs. These ETFs are set to trade on major stock exchanges, including the NYSE Arca and the Cboe Exchange.
However, Valkyrie Digital Assets chose a different path, postponing its plans to acquire Ethereum futures for its merged Bitcoin and Ethereum futures ETFs. The firm awaits official approval from the SEC and expects to receive it on October 3.
In a related development, Grayscale Investments submitted an application to convert its Grayscale Ethereum Trust (ETHE) into a spot ETF. This move reflects the growing interest in offering traditional financial products related to cryptocurrencies.
Bitcoin's price action saw it reach $27,870 after reaching an intraday peak of $28,564 on Monday. In 2023 alone, Bitcoin has surged by an impressive 68%. Ethereum, on the other hand, briefly touched $1,749 in the morning, its highest level since late August. Ethereum's value has surged by nearly 40% in 2023.
While these cryptocurrency price surges are certainly exciting, they are not without their fluctuations. Investors and enthusiasts will be keeping a close eye on the markets as October unfolds, hoping to capitalize on the historically favorable trends in the crypto world.