Bitcoin nears $100,000 as short interest on BTC miners grows, and Gary Gensler quits the SEC
DATA from CryptoCompare shows that the price of Bitcoin moved up significantly over the past week from around $90,300 at the beginning of the week to a new all-time high near the $100,000 mark, before a slight correction saw BTC drop back down to $98,000.
Ethereum’s Ether - the second-largest cryptocurrency by market capitalisation – saw similar performance, going from around $3,050 at the beginning of the week to now stand close to the $3,500 mark after a significant upward move.
Headlines in the cryptocurrency space this week revealed that in the third quarter of the year wealth management clients of major financial institutions, including Bank of America, Goldman Sachs, and Morgan Stanley, added to their Bitcoin exposure through exchange-traded funds (ETFs).
Goldman Sachs, for example, reported holdings of spot Bitcoin ETF shares valued at $710 million as of the end of September, nearly doubling its allocation from the previous quarter. Similarly, Australian investment bank Macquarie Group revealed during the quarter it acquired 132,355 shares of IBIT, valued at $4.8 million. Wells Fargo, with a minor stake, concentrated its holdings in the Grayscale Bitcoin Trust (GBTC) and the Grayscale Bitcoin Mini Trust (BTC).
Other major financial players, including Morgan Stanley, Cantor Fitzgerald, Royal Bank of Canada, Bank of America, UBS, and HSBC, largely maintained their existing positions without significant additions or reductions.
Over the week, options on BlackRock’s spot Bitcoin ETF, the iShares Bitcoin Trust, launched on the Nasdaq, and saw $1.9 billion in volume on the first day. The lion’s share of activity saw traders bet on the ETF’s price nearly doubling.
Nasdaq-listed business intelligence firm MicroStrategy, the largest corporate holder of Bitcoin, meanwhile kept on accumulating BTC and moved to raise $1.75 billion via a convertible note offering to keep adding to its stash. The firm already has 331,200 BTC worth over $30 billion on its balance sheet.
Bitcoin’s price has been surging since Republican candidate Donald Trump won the US presidential elections, while open interest on others skyrocketed. Mantra, a Layer-1 blockchain focused on real-world assets, saw a 500% rise since the election, according to CCData.
The firm’s data also shows memecoins have been capturing attention, while XLM and XRP saw growth of 157% and 309%, respectively.
Short interest in Bitcoin miners hits record high
Bitcoin’s price rise has seen the short interest against Bitcoin miners surge by over 50% in a 30-day period to $4.6 billion, a new high for the year, putting traders at risk of a short squeeze. Short sellers borrow shares of a company, sell them in the market, and then repurchase them at a lower price to return the borrowed shares, profiting from the price decline.
However, if the stock price rises sharply, short sellers may be forced to buy back the shares at a higher price, leading to substantial losses. A short squeeze can occur when a large number of short sellers are simultaneously forced to buy back shares, causing the stock price to rise even further.
In recent months, Bitcoin mining stocks have seen significant surges, as since BTC’s low on September 6 Riot Platforms rose 86%, CleanSpark 73%, and Marathon Digital around 55%.
Meanwhile, decentralized applications on the Solana network have been seeing record revenue amid a memecoin trading boom that has been taking advantage of the network’s low transaction fees.
Gary Gensler to step down as SEC Chair
This week Gary Gensler, the Chairman of the US Securities and Exchange Commission (SEC), announced he will step down from his post the day President-elect Donald Trump takes office, on January 20.
Under Gensler, the regulator pushed to bring more transparency to the markets, but led a crackdown on the cryptocurrency industry that saw it sue various major crypto players, including Binance, Coinbase, Ripple, and Kraken.
Over the week the regulator also delayed its decision on the crypto index ETF proposed by major asset manager Franklin Templeton, citing a need for additional time to review the proposed rule change.
The regulator’s decision to extend the review period comes after it received no public comments following the publication of the proposed rule change in the Federal Register on October 8. Meanwhile, digital asset manager Bitwise moved towards launching a spot Solana ETF by registering a statutory trust for it in Delaware.
Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies.
