Analysts at crypto research firm K33 – formerly Arcane Research – claim that the potential of a bitcoin (BTC) exchange-traded fund (ETF) spot approval to drive prices higher is being dramatically underestimated by the crypto market.
In a Sept. 5 market report, K33 chief analyst Vetle Lunde and vice president Anders Helseth said the past three months had significantly improved the chances of spot bitcoin ETF approval, but that sentiment hasn’t translated into the price of bitcoin or other major ones Cryptocurrencies reflect assets.
Analysts explained that while Bitcoin has all but given up gains in the wake of Grayscale’s legal victory over the Securities and Exchange Commission, approval would “attract huge inflows” and significantly increase buying pressure for Bitcoin.
Bitcoin bounced back after Grayscale’s win. Source: K33 Research
However, the downsides of a potential spot ETF rejection would be “negligible” and bitcoin prices would just carry on as usual, they wrote.
Lunde and Helseth added that given the increased likelihood of spot ETF approvals — several Bloomberg analysts are now forecasting a 75% chance of approval within the year — the market outlook for ETFs is fundamentally wrong.
“I firmly believe the market is wrong. This is by all appearances a buyers market and it is reckless not to aggressively accumulate BTC at current levels.”
Analysts based their bullish forecast on the recent 2% surge in the tech-heavy Nasdaq-100 index, which is often viewed as an indicator of the broader market’s risk appetite.
ETH will outperform BTC
Additionally, Lunde and Helserth expressed optimism on the price of Ether (ETH), stating that ETH is likely to outperform Bitcoin over the next two months as it benefits from strong momentum ahead of a futures-based ETF listing.
Related: BTC bull market started in March, more to be realized in a year – Arthur Hayes
They explained that ether could follow a similar path as bitcoin, which gained about 60% in the weeks leading up to the launch of the first bitcoin futures-based ETF on Oct. 19, 2021.
Judgment on a futures-based Ether ETF is due in mid-October and is reportedly set to get a green light from the SEC.
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