Speculation about the potential impact of ETF approval on Bitcoin (BTC) is rife. Greeks.live, an options platform, offers insights into how the exchange-traded fund could influence the value of the leading cryptocurrency.
Possible approval of a Bitcoin ETF is imminent
The US Securities and Exchange Commission (SEC) will reportedly inform asset managers seeking to launch a spot Bitcoin ETF (BTC) about the approval status of their applications as early as next week.
A veteran trader known for accurately predicting the crypto breakout of the year is now offering insights into how Bitcoin can optimally perform following a possible approval of BTC spot market exchange-traded fund (ETF) applications.
DonAlt, the pseudonymous analyst, says that a prolonged period of consolidation following a possible ETF approval would be the best-case scenario for Bitcoin. According to The Daily Hodl, he expects a “sell-the-news” reaction to the upcoming ETF announcement on January 10th. After that, the price of BTC is unlikely to fall significantly below $20,000.
However, Greeks.live points out that the market was already anticipating the possible approval of the Bitcoin ETF. Therefore, it is considered that the approval may not bring significant returns for the asset or result in significant price movements.
There is news in the market that the SEC will pass the Bitcoin spot ETF application as early as next Tuesday, but there has been little fluctuation in the key term IVs and price.
Looking at the options data, Options IV fell on January 12th, which is highly correlated with the ETF… pic.twitter.com/f1B4ZPC05d
– Greeks.live (@GreeksLive) December 31, 2023
The platform bases its assessment on the minimal volatility observed in the long-term implied volatilities (IVs) and the current Bitcoin price. Implied volatility, which indicates market expectations regarding the future performance of an asset, plays a crucial role in this analysis.
On January 12th, despite the belief in a strong correlation between Option IV and the Bitcoin ETF, there was a decline rather than a rise. This drop in implied volatility, coupled with the overall low volatility, suggests that the impact on Bitcoin price may not be material, even with significant news imminent.
At the time of writing, Bitcoin is trading at $42,509, reflecting a modest 0.7% price increase over the past day. Notably, the cryptocurrency has seen a remarkable 156% increase this year, partly due to expectations surrounding a spot ETF.
There is news in the market that the SEC will pass the Bitcoin spot ETF application as early as next Tuesday, but there has been little fluctuation in the key term IVs and price.
Looking at the options data, Options IV fell on January 12th, which is highly correlated with the ETF… pic.twitter.com/f1B4ZPC05d
– Greeks.live (@GreeksLive) December 31, 2023
Goldman Sachs predicts a bullish year
Investment bank Goldman Sachs predicts significant growth in the cryptocurrency market, particularly highlighting the potential growth of Bitcoin and Ether exchange-traded funds (ETFs).
According to CoinGape, Goldman CEO Mathew McDermott warns not to expect an immediate shift in the cryptocurrency landscape following ETF approval. Instead, he envisions a gradual development over the next year, depending on regulatory approval.
Big players like BlackRock and Fidelity are awaiting the SEC's decision on their Bitcoin ETF applications. The prevailing sentiment is optimistic and hopeful for a positive outcome that could open new avenues for institutional investment in Bitcoin.
Looking ahead to 2024, McDermott predicts significant growth in the crypto market. This optimism is due to the increasing integration of blockchain technology into commercial applications and the growing involvement of traditional financial institutions in the crypto space.
A focus for McDermott is the development of tokenization marketplaces. He predicts that these platforms will gain significant traction, particularly among investors, due to the emergence of on-chain secondary liquidity – a crucial factor in market expansion.
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