Awaiting an approved one Spot Bitcoin ETF The heated discussions on this topic have peaked in the first days of 2024 and are now focused on one question: Is this already priced in?
Some in the crypto space think the answer is yes. It's been over two months of continuous gains for BTC, almost entirely due to this excitement around the upcoming approval of a Bitcoin ETF. How much juice could be left at this point, when the cryptocurrency is almost double its October price?
However, many die-hard Bitcoin proponents emphasize that the event is not priced in – meaning they believe BTC will continue to skyrocket If and when A Bitcoin ETF will be approved in the coming weeks.
A Bitcoin ETF would finally give traditional retail investors an easy way to gain exposure to BTC – no crypto exchanges or wallets required. But the SEC has rejected every proposal for such a product over the past 10 years, citing the possibility of market manipulation in Bitcoin as a key reason. But that was then and BlackRock is now – and the Wall Street giant's entry into the Bitcoin ETF race means it will finally happen, most analysts say.
All signs point to an approval, which could then lead to a wave of fresh capital into the market. This is why some traders and analysts are so optimistic and expect an almost immediate impact on BTC price following the SEC's green light.
Such predictions are typically based on the belief that even taking recent gains into account, a significant portion of the market has been unable to process the significance of a Bitcoin ETF approval, something some experts predict Change Bitcoin forever by integrating the digital asset into the global economy.
“As much as the event is priced in, considering how much is still at stake, there is definitely some money on the table waiting for actual confirmation,” says Joel Kruger, strategist at LMAX Grouptold Decipher.
Kruger predicts this will happen in a day or two after the approval of the first Bitcoin ETF – which analysts predict in the next week– The price of BTC is likely to rise by 10%. At this point, he says, there could be a short period of consolidation and correction before the world's leading cryptocurrency regains momentum. As early as spring, according to the strategist, BTC could break through its all-time high of $69,000, which was briefly reached at the end of 2021.
James Butterfill, head of research at CoinShares, agrees that BTC is poised to continue its winning streak even after a Bitcoin ETF is approved.
“We don’t believe the price is full for a number of reasons,” he said Decipher.
Butterfill points to nearly $14 trillion worth of American assets that he says will have the opportunity to gain exposure to Bitcoin once a spot Bitcoin ETF is given the green light. While only a fraction of this market will likely choose to do so, it's hard to overstate the significance of the fact that Bitcoin could soon theoretically be linked to the majority of the U.S. economy.
Additionally, the analyst observed that inflows into existing Bitcoin investment products in the last quarter came primarily from Europe – which to him suggests that many US investors are waiting for US-based ETFs to become available in order to then invest in Bitcoin to get in.
However, other analysts were hesitant to paint such a clearly rosy picture of a Bitcoin ETF's likely impact on price.
Vetle Lunde, senior analyst at K33 Research, wrote in one report On Wednesday, he announced that the probability of a Bitcoin ETF approval is 75% “Sell news” Event – that is, an event in which the price of BTC falls due to a flood of investors selling the cryptocurrency at the supposed peak of medium-term hype.
“All indications are that traders are significantly exposed ahead of the verdict, as derivatives brought huge premiums following BTC’s continuous upward momentum over the past three months,” Lunde said.
However, the analyst noted that the event could become a net boon for BTC if ETF inflows were significant enough to offset the “Sell the News” outflow. Lunde estimates that Bitcoin ETFs would need to attract $2.3 billion in new inflows in January alone to prevent a decline in the asset's price. This new capital would have to be really new; Moving funds from Bitcoin futures ETFs to newly created spot Bitcoin ETFs would not count.
Lunde puts the probability of such an outcome at 20%—certainly not impossible, but not particularly likely either. John Palmer, president of spot crypto clearinghouse Cboe Digital, said previously Decipher that a great first-year outcome for spot Bitcoin ETFs would be to attract $10 billion to $15 billion in investments by the end of 2024.
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