With equity markets open just a half day, the day after Thanksgiving is usually a noneventful day in financial markets. However, something notable did occur last Friday: Bitcoin jumped to its highest prices in 18 months.
Bitcoin surged above $38,000 on November 24 for the first time since May 2022. In what could be a catalyst for exchange traded funds such as the Invesco Alerian Galaxy Crypto Economy ETF (SATO), bitcoin’s albeit brief history indicates that when the cryptocurrency moves to $38,000, momentum will carry it beyond $40,000.
SATO’s largest holding is the Grayscale Bitcoin Trust (GBTC). The rest of the ETF’s portfolio is a slew of crypto-correlated equities. In other words, momentum for the largest digital currency can and often does matriculate down to assets such as SATO.
Other Indicators of More Potential Gains for SATO
Some investors want to assess the possibility of more near-term upside for bitcoin and SATO. The futures market might offer some clues.
“As for derivatives markets linked to Bitcoin, we may witness more momentum tomorrow and in the coming days. According to data provided by Deribit, tomorrow will be the execution date for what are equivalent of more than $4 billion worth of options contracts for Bitcoin, which they are more than 107 thousand contracts, which represent part of more than 14 billion options outstanding,” noted Samer Hasn, an analyst at XS.com. “This coincides with a further record rise in the value of open interests for Bitcoin futures contracts, which reached approximately $15.93 billion, which represents a new highest level not seen since April of last year.”