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The long-awaited Bitcoin seal of approval
Representations of the cryptocurrency Bitcoin are placed on a PC motherboard in this illustration taken June 16, 2023.
Dado Ruvic | Reuters
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SEC approves
A long-awaited and controversial decision finally arrived Wednesday from the Securities and Exchange Commission. enabling the creation of Bitcoin exchange-traded funds in the United States, which will give regular investors access to the world’s oldest and most popular cryptocurrency. The first funds are expected to begin trading on Thursday. The price of Bitcoin, however, lost about 2%.
Wall Street ends higher
American stocks The trading session was higher on Wednesday as investors awaited the start of earnings season later in the week and inflation data. Rising shares of Intuitive Surgical and Lennar boosted markets. In Asia, Japan Nikkei 225 Index violated the 35,000 points for the first time since February 1990.
China Courts Investors
China is now committed to foreign investments are easieras reported by state media. Chinese Vice Premier He Lifeng met with global financial leaders on Wednesday at a time when tensions between China and the United States and concerns about its economic growth have made investors wary of investing in the country.
Inflation report expected
December inflation datawhich is expected to be released Thursday, could very well challenge the market’s perception of when the Federal Reserve will start cutting interest rates and by how much. Consumer prices were likely to have edged up last month, with the Dow forecasting a 0.2% gain in the final month of 2023 and a 3.2% increase for the year as a whole.
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Bitcoin just received its biggest stamp of approval, giving cryptocurrencies their most powerful bragging rights yet.
The SEC’s decision to approve the creation and trading of Bitcoin ETFs will enable greater adoption of the world’s oldest cryptocurrency by the traditional financial sector.
Grayscale Bitcoin Trust, which holds about $29 billion of the cryptocurrency, will likely convert to an ETF following the decision, while Wall Street giants BlackRock and Fidelity will also enter the field.
“Today’s news is probably the most significant for Bitcoin since its launch, but the approval of spot ETFs should not be viewed in isolation, given the timing of the upcoming halving in April, which reduces BTC supply and historically triggers the new bull market. These two events combined could well send Bitcoin to $100,000 in 2024,” said Antoni Trenchev, co-founder and managing partner of digital asset firm Nexo.
Trenchev also noted that “it is tempting to say that the approval of spot Bitcoin ETFs is a buy-rumor-sell-information event.”
The decision comes a day after an official SEC social media account falsely stated that Bitcoin ETF trading had been approved. The SEC confirmed that the account had been compromise.
U.S. stocks also posted gains on Wednesday, S&P 500 closing up 0.57%, while the Dow Jones Industrial Average added 0.45%. Nasdaq Composite Index gained 0.75%.
Later today, investors will also focus on consumer price data, which is expected to show inflation edged up in the final month of 2023.
This could potentially lead to questions about whether markets are anticipating Fed rate cuts in advance. There is still a significant gap between what the US central bank has announced in terms of easing its monetary policy and what the market expects.