By Yasin Ebrahim
Investing.com - Bitcoin rebounded from its recent slump on Monday, as profit taking in the popular cryptocurrency abated, with some experts touting the launch of a U.S. bitcoin ETF as the next major catalyst for the popular crypto currency.
BTC/USD jumped 11% to $48,545, rebounding from a low of about $43,000.
Spent output profit ratio, or SOPR, an on-chain metric by Glassnode, turned negative a day earlier, a sign that traders were selling at a loss, indicating the recent profit taking had exhausted. In a bull market, the SOPR turning negative has been shown to be a powerful 'buy the dip' signal. The on-chain net realized loss hit its lowest level since April 2020, Glassnode said in tweet.
Following the rebound in bitcoin, the next key driver for the popular crypto will likely be fueled by further institutional access with the launch of bitcoin ETF in the U.S. Demand for a U.S. bitcoin ETF has been growing in recent years, and its ability to attract further investment dollar into the popular crypto was seen just days ago as Canada's maiden bitcoin saw record inflows.
Previous attempts to launch a bitcoin ETF in the U.S. have failed to win the backing of the U.S. Securities and Exchange Commission. But with a new leader of the SEC soon to take the helm, hope has been revived somewhat. VanEck Associates filed an application for a bitcoin ETF in December last year.
"A Bitcoin ETF listing in the US is likely to be the next major signal of progress in adoption," said Seamus Donoghue, VP Sales and Business Development at METACO. As we have seen with the recent new ETF listings in Canada, in a matter of days they have set records for AUM inflows for new fund listings--an ETF listing in the US would be transformative and would enable anybody with a brokerage account to access Bitcoin."
The move comes as Citigroup (NYSE:C) suggested that popular cryptocurrency could "become the currency of choice" for international travel amid wider adoption. But crypto experts insist that bitcoin is not a currency but rather a digital commodity that can serve as a store value.
Citi in its somewhat bullish take on bitcoin did admit, however, that there are myriad of challenges for bitcoin to become a currency including "capital efficiency, insurance and custody, security, and ESG considerations from Bitcoin mining."