The price of Bitcoin (BTC) should “logically” see a correction once spot Bitcoin exchange-traded funds (ETFs) are approved, although commentators also acknowledge that crypto is also a “wild card.”
Bitcoin has gained momentum over the past 11 months, with a rise in March due to uncertainty in the banking sector, another rise in June when BlackRock filed for a spot Bitcoin ETF, and again in October, also on optimism about the spot -Bitcoin ETF approvals.
On December 3, Bitcoin surpassed $40,000, its highest level in 19 months.
Sell the news event
James Edwards, a cryptocurrency analyst at Finder, said that the approval of a spot Bitcoin ETF should “logically” trigger a sell-off.
“I would like to say that this logically leads to a sell-the-news type event.”
“Buy the rumor, sell the news” is a phrase that describes a situation in which a stock or asset rises before expected positive news or events, but falls as soon as the news is confirmed or the event occurs.
The longer #Bitcoin continues to rise towards 50,000 without ETF approval, the more I think this could be a sell event.
Don't troll.
– Crypto Caesar™️ (@crypto_caesar1) December 2, 2023
“The idea that this will lead to widespread institutional buying on day one is a little overly optimistic,” Edwards explained, adding that fund managers are unlikely to “follow suit the moment it goes live.”
“It could be months – if not years – before we really see breakthrough inflows,” he added.
Crypto is a “wild card”
However, many, including Edwards, say that doesn't mean a significant correction is definitely on the horizon.
Ryan McMillin, the chief investment officer at Merkle Tree, admits that while Bitcoin hasn't seen a correction in over 100 days – meaning the risk of a correction is increasing – spot Bitcoin ETFs are also the “hottest.” most anticipated ETF launch of all time. and that any sell-off is quickly brought up.
Meanwhile, CK Zheng, co-founder of cryptocurrency investment firm ZX Squared Capital, believes any price decline will be “superficial.”
“We expect any market decline to be superficial as the fundamentals for BTC are better than ever, including the upcoming BTC halving next year, massive money printing by global central banks, and ongoing geopolitical uncertainty around the world belong,” he said.
Even Edwards acknowledged that cryptocurrencies are nothing more than a “wild card” – and that even if logic dictates a correction, that doesn’t necessarily mean it will happen in cryptocurrencies.
December outlook
Analysts also do not expect Bitcoin to lose momentum in December.
Edwards said there were already early signs that institutional investors were speculating about the ETFs' approval, with inflows into existing Bitcoin futures ETFs surging in recent days.
“In the worst case scenario, I expect prices to remain unchanged as investors wait for confirmation either on the charts or through an ETF approval.”
Crypto lawyer Joe Carlasare also saw “slim chances” of a serious Bitcoin correction before ETF approval in an X post on December 4th.
“Why would any big sellers show up when we are just weeks away from likely approval?” said Carlasare.
It is really unlikely that there will be a major correction in Bitcoin price as #Bitcoin Spot ETF approval is imminent. So it goes on from here for me. Up and away! pic.twitter.com/yCCFQ3rSBS
— Jason A. Williams (@GoingParabolic) December 4, 2023
Related: Bitcoin’s Top of Funnel Is Getting Quieter, Swan Bitcoin CEO Suggests
Meanwhile, mass approval of Bitcoin ETFs could be enough to bring mainstream focus back to the cryptocurrency market, says Henrik Anderrson, chief investment officer at Apollo Capital.
The industry is awaiting a highly anticipated potential approval window between January 5th and 10th, 2024.
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