Bitcoin Holds $28K as Stocks Buckle Under Interest Rate Concerns

The price of bitcoin [BTC] is little changed on Wednesday at $28,300 despite roughly 1% declines in the S&P 500 and Nasdaq as interest rates carve out fresh new post-global financial crisis highs.

The broader CoinDesk Market Index (CMI) is down modestly, led by about 1% drops for Solana's [SOL], Polygon's [MATIC], and litecoin [LTC].

Socking the stock market indices is a new leg up in interest rates. The U.S. 30-year Treasury bond yield is higher by nine basis points to 5.02%. Should that level hold, it would be the first close above 5% for the long bond since the summer of 2007. The 10-year Treasury note yield is up seven basis points to 4.905%, also the highest yield since that summer.

Spot bitcoin ETF appears near, but what then?

While a tweet earlier this week claiming the SEC had approved BlackRock's spot bitcoin ETF application turned out to be false, there seems to no longer be any disagreement among market participants that approval of one or more of these vehicles is coming and perhaps sooner, rather than later.

Appearing on CNBC Wednesday morning, Galaxy Digital (GLXY.TO) CEO Mike Novogratz – whose firm has teamed up with Invesco for a spot bitcoin ETF application – said he believes approval is coming in 2023. "All the indications of dealing seem to be heading in the right direction ... There's a tremendous amount of pressure to do something that is rational."

ARK Invest CEO Cathie Wood (whose company also has a spot ETF application) said the SEC is now reaching out with questions on a spot product, which she notes is a positive change in behavior from the agency.

For his part, SEC Chair Gary Gensler – whose opinion is likely the only one that matters – for now is keeping his cards close to his vest. In a Bloomberg TV appearance, Gensler acknowledged the agency's staff is looking at multiple exchange-traded products (ETPs), but little more.

The question for the bulls going forward is that if spot ETF approval is so widely known and expected, wouldn't that news be reflected in the price of bitcoin, which has nearly doubled this year, but remains about 60% below its all-time high hit a bit more than two years ago.

Blockchain analytics firm CryptoQuant isn't convinced it's all priced in yet, suggesting $155 million could roll into bitcoin via spot ETFs, potentially nearly tripling the crypto's price.