In October, the crypto market saw a significant surge, with Bitcoin (BTC) leading the charge. Bitcoin’s value jumped more than 27%, reaching a 17-month high of $35,000, after hovering around $27,000 earlier in the month. This rally was largely attributed to growing optimism surrounding the potential approval of Bitcoin ETFs in the United States.
The collective market capitalization of all cryptocurrencies also rose nearly 19% to $1.255 trillion, the most substantial increase since January.
Bitcoin ETFs and Their Impact
Bitcoin ETFs hold great promise for the cryptocurrency, as they provide an accessible way for average investors to enter the market. The rejection of Grayscale Bitcoin Trust‘s (GBTC) conversion into an ETF was challenged in court, increasing the likelihood of SEC approval for such products, and potentially opening doors for other ETF applications.
While the overall crypto market experienced gains, not all sectors benefited equally. The CoinDesk DeFi Index (DCF), which covers decentralized finance-related tokens, posted a modest 7% gain. Ethereum’s Ether (ETH) had a 7% increase, while the CoinDesk Computing Sector (CPU), focused on Web3 infrastructure and distributed computing, surged by almost 32%.
Crypto sector returns in October (CoinDesk)
Solana (SOL) was a standout performer with a remarkable 70% monthly return, driven by increased network activity and reduced concerns about token sales.
Factors Behind the Rally
Investor excitement about potential Bitcoin ETFs in the U.S. played a significant role in the October rally. Analysts anticipate ETF approvals by December, and rising BTC derivatives funding rates indicated traders “panic bought” to join the rally. Sector-specific momentum, short liquidations, and macroeconomic factors also contributed to the price increase, according to CoinMetrics.
BTC rallied in October on a confluence of catalysts (CoinMetrics)
Following its impressive October performance, analysts believe Bitcoin still has room to grow. Some foresee a target of $40,000 shortly. Despite the exuberant sentiment, Bitcoin’s upward momentum is expected to persist, making it a cryptocurrency to watch in the coming weeks.
