The price of bitcoin briefly crossed the $30,000 mark Friday for the first time since August on optimism that a spot bitcoin exchange-traded fund (ETF) will likely be approved by the U.S. Securities and Exchange Commission (SEC) in the near future.

Spot Bitcoin ETF Approval Expected Within Months

Much of the increased optimism around a spot bitcoin ETF approval comes from recent developments in a lawsuit regarding Grayscale Investments's intention to convert their Bitcoin Investment Trust (GBTC) into an ETF. The Securities an Exchange Commission chose not to appeal a decision by the courts that disagreed with the regulator's reasons for turning down Grayscale's ETF conversion. The courts could issue a final mandate soon that will provide more clarity on the next steps in that process.

But there were other triggers too. On Monday, an incorrect report that the SEC had approved BlackRock's spot bitcoin application, pushed bitcoin prices higher.

"Some of this rally is way beyond the rumor," said Blackrock CEO Larry Fink, told Fox Business in an interview clarifying the incorrect report. "I think the rally today is about a flight to quality with all the issues around the Israeli war now [and] global terrorism. And I think there are more people running into a flight to quality, whether that's in treasuries, gold, or crypto, depending on how you think about it. And I believe crypto will play that type of role as a flight to quality."

In an interview with CNBC earlier this week, Galaxy Digital Holdings CEO Michael Novogratz said he thinks the SEC's approval of a spot bitcoin ETF is going to happen before the end of the year.

Previously, Bloomberg analysts James Seyffart and Eric Balchunas estimated a spot bitcoin ETF's chances of approval by January 10, 2024 at 90%. A research report released by JPMorgan on Wednesday also indicated a spot bitcoin ETF approval is likely by that same date.

The eventual approval of a spot bitcoin ETF would be a major step toward the crypto asset's regulatory acceptance, making it easier for anyone to own the cryptocurrency and enabling more institutional money to enter the market. In a recent interview, Morgan Creek Capital CEO Mark Yusko indicated $300 billion could move into bitcoin following a spot ETF approval.