Bitcoin rockets to $35,000 for the first time in 17 months on optimism that an ETF will be approved

• Bitcoin hit $35,000 on Tuesday, its highest since May 2022, amid hopes of a spot ETF approval.
• Optimism surrounding the ETF approval has been driving a bitcoin rally, which is up 107% year-to-date.

Bitcoin jumped as much as 11.5% on Tuesday to hit $35,000 amid hopes that regulatory approval for a long-awaited ETF is on the way.

It later pared gains to about $34,200 but bitcoin is up 28% this month alone and 107% year to date — a major comeback from its precipitous drop in 2022.

Optimism in the crypto market has been building for weeks after financial titans like BlackRock, Fidelity, and VanEck filed applications with the Securities and Exchange Commission to sell spot bitcoin ETFs.

Further fueling the excitement was Grayscale Investment's recent legal victory against the SEC's attempt to block it from converting its bitcoin trust into a spot bitcoin ETF.

While regulators have already approved bitcoin futures ETFs, a spot ETF will essentially create a tradeable item tied to the current price of bitcoin. Crypto advocates hope a spot ETF would allow many more investors to participate in the industry without actually owning bitcoin.

Billionaire crypto bull Mike Novogratz said last week that he sees spot ETF approval going through this year.

On Monday, Bloomberg Intelligence's ETF analyst Eric Balchunas flagged on X that an "iShares Bitcoin Trust" has been listed on the Depository Trust and Clearing Corporation website, a company that clears securities transactions.

While it doesn't mean the ETF is actually trading yet, such preparations were seen as bullish signs that regulatory approval may be imminent.

There are more than 10 spot bitcoin ETF applications under review by the SEC.

The SEC has been wary of a spot bitcoin ETF because it believes the token is too speculative and volatile for an ordinary investor. Regulators are also concerned about fraud and manipulation in the crypto market. But following the August court ruling in favor of Grayscale, the SEC has decided not to appeal the decision.

Some analysts have estimated that SEC approval could result in the price of bitcoin skyrocketing to a stunning $180,000 before the cryptocurrency's scheduled halving in April 2024.