Cryptos Are Suddenly Exploding Higher

Cryptos Are Suddenly Exploding Higher

by Tyler Durden

Wednesday, Oct 06, 2021 – 09:18 AM

While we do not see any obvious catalyst, cryptocurrencies are exploding higher this morning as the squeezes spread from energy to stocks to bonds to bitcoin. The last few days have seen positive comments from Powell (no China-style ban), Gensler (no China-style ban), and optimism about a Bitcoin ETF.

There is a very good chance that the Securities and Exchange Commission will finally approve a Bitcoin exchange-traded fund in two weeks, on Oct. 18.

Yes, the SEC has kicked can on bitcoin ETF approval BUT that is for the physically-backed ones under ’33 Act. The futures ETFs filed under the ’40 Act (which Genz loves) are very much alive and likely on schedule (we think 75% chance approved in Oct). Here’s our odds:

But many investors shouldn’t get too excited because it will just be a future-based Bitcoin ETF, according to Nate Geraci, ETF Store president, and Eric Balchunas, Bloomberg Intelligence senior ETF analyst.

“It would still open the floodgates for institutional adoption and hopefully result in a spot-backed ETF being approved in the not-so-distant future, which would allow ordinary people to include the asset easily” in their brokerage accounts, Marcus Sotiriou, sales trader at the U.K.-based digital asset broker GlobalBlock, wrote in an email to CoinDesk.

Bitcoin futures are trading at a notable premium to spot in anticipation of the futures-based-ETF…

The big driver of this move appears to be a major short-squeeze…

#Bitcoin shorts getting rekt. Today is the second biggest short squeeze since July 25th with ~200 mn USD in short liquidations. On July 25th we had ~758 mn USD in short liquidations, though.

And alternate currencies are suddenly soaring as Bitcoin just surged to $55,500…

Source: Bloomberg

Was this a big short-stop run above the early September highs?

Source: Bloomberg

While Bitcoin is at its highest since May, Ethereum is also surging…

Source: Bloomberg

Bitcoin’s outperformance has pushed it to its strongest relative to Ethereum since July…

Source: Bloomberg

As one veteran trader mocked – is Europe about to announce the use of Bitcoin mining rigs to heat its citizens’ homes given the cost of NatGas?

Oh the irony that on the day the US defaults, we get a Bictoin ETF.

USA Sovereign Risk is spiking…

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