How a big crypto villain helped fuel bitcoin's surge
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Bitcoin's long and tortured journey to new all-time highs this week has an unlikely hero in its story.
Why it matters: The SEC — whose leader Gary Gensler has been implacably antagonistic toward crypto — gave bitcoin an improbable yet undeniable seal of approval.
- The agency's (reluctant) green light has sent billions of dollars flowing into the newly minted ETFs, boosting its appeal among retail and institutional investors alike.
Driving the news: A number of developments — such as halving and true-believing "hodlers" who never lost faith — have emboldened the bitcoin rally, which has more than tripled in price since melting down to under $16,000 in the wake of FTX's late-2022 collapse.
- There had been clear momentum pushing it higher. Yet bitcoin's tear really picked up speed in January after the Securities and Exchange Commission approved exchange-traded funds after years of denials.
Follow the money: The success of spot bitcoin funds has led BlackRock to file paperwork of its own to get approval to park some of a bond fund into a bitcoin ETF.
- Prominent bitcoin investor Anthony Pompliano writes that is a sign of "a potential new source of capital into bitcoin — trillions of dollars of existing funds that need to find a home in an asset that performs better than the current asset allocation."
- A groundswell of big Wall Street banks are also contemplating their own moves into the space.
- "When the ETFs got approved by the SEC, people said 'game on'," CK Zheng, the founder of Palm Beach Gardens-based ZX Squared Capital, tells Axios. He added that it wasn't just retail players but big institutions that buy and "stay put."
State of play: After a cryptocurrency "winter" that lasted two years, the digital token set a fresh record above $69,000 on Tuesday.
- In true Bitcoin fashion, it rapidly gave back 10% before recouping some of its losses on Wednesday.
What's next: The daily emission of new bitcoin will drop in half sometime in April (as it does every four years), which is likely to boost the spot price. A wave of excitement has kicked in a bit later after each of the last three.
The bottom line: The darkest days of crypto's winter appear to be behind it, with the sector's worst offenders — looking at you, Sam Bankman-Fried — either jailed or facing justice.
Editor's note: This story has been updated to correct the first name of bitcoin investor Anthony Pompliano.
