In anticipation of approval Spot Bitcoin ETF reaching feverish levels in early 2024, frenzied discourse on the subject has now settled around a single question: is it already priced in?
Some crypto players believe the answer is yes. It’s been over two months of uninterrupted gains for BTC, fueled almost entirely by excitement surrounding the imminent approval of a Bitcoin ETF. At this point, with the cryptocurrency nearly doubling its price in October, how much juice could there still be left to squeeze?
But many die-hard Bitcoin defenders insist the event was overlooked, meaning that, in their view, BTC is poised to soar even higher. If and when a Bitcoin ETF is approved in the coming weeks.
A Bitcoin ETF would finally offer traditional retail investors a simple way to gain exposure to BTC – no exchange or crypto wallet needed. But the SEC has rejected all proposals for such a product over the past 10 years, citing the potential for manipulation of the Bitcoin market as the main reason. But that was then and BlackRock is now — and the Wall Street titan’s entry into the Bitcoin ETF race means it’s finally going to happen, most analysts say.
All signs point to approval, which could then lead to a wave of new capital entering the market. This is why some traders and analysts are so optimistic and expect an almost immediate impact on the price of BTC after the green light from the SEC.
Such predictions tend to focus on the belief that even taking into account recent gains, a substantial portion of the market has not been able to understand the significance of the approval of a Bitcoin ETF, which, according to some experts, will be the case. change Bitcoin forever by integrating the digital asset into the global economy.
“Even though the event was priced in, given how high the stakes are, there is certainly money waiting for actual confirmation,” said Joel Kruger, a strategist at LMAX Groupsaid Decrypt.
Kruger predicts that within a day or two after the first Bitcoin ETF is approved, what analysts are predicting next week—The price of BTC will likely increase by 10%. At this point, he says, there could be a brief period of consolidation and correction before the world’s top cryptocurrency starts pumping again. As early as spring, according to the strategist, BTC could break its record price of $69,000, which it briefly touched at the end of 2021.
James Butterfill, head of research at CoinShares, agrees that BTC is poised to continue its winning streak through the approval of a Bitcoin ETF and beyond.
“We don’t think the price is fully set for several reasons,” he said. Decrypt.
Butterfill points out that U.S. assets worth nearly $14 trillion will, he believes, have the opportunity to gain exposure to Bitcoin once a Bitcoin ETF is given the green light. Although only a fraction of this market is likely to buy into it, it is nevertheless difficult to overstate the significance of the fact that Bitcoin could soon have theoretical interconnectivity with the majority of the US economy.
Additionally, the analyst observed that over the past quarter, inflows into existing Bitcoin investment products came primarily from Europe, suggesting to him that many U.S. investors are waiting for U.S.-based ETFs to are available to then get started with Bitcoin.
Other analysts, however, have been reluctant to paint such a rosy and unambiguous picture of the likely price impact of a Bitcoin ETF.
Vetle Lunde, principal analyst at K33 Research, wrote in a report As of Wednesday, he estimates it is 75% likely that a Bitcoin ETF approval will become a “sell the news” event, that is, an event that causes the price of BTC to fall due to a flood of investors selling the cryptocurrency at the perceived peak of a mid-term hype.
“All indications are that traders will be significantly exposed ahead of the verdict, with derivatives driving massive premiums after the last three months of continued BTC bullish momentum,” Lunde said.
The analyst noted, however, that if ETF inflows were large enough to offset this “news sell-off” outflow, the event could end up becoming a net boon for BTC. According to Lunde’s estimates, Bitcoin ETFs are expected to attract new flows of $2.3 billion in January alone to prevent the asset’s price from falling. This new capital should be truly new; the transfer of funds from Bitcoin futures ETFs to newly created spot Bitcoin ETFs would not count.
Lunde estimates the probability of such an outcome at 20%—certainly not impossible, but also not particularly likely. John Palmer, president of cryptocurrency exchange Cboe Digital, previously said Decrypt that a tremendous outcome for spot Bitcoin ETFs in their first year would be to attract $10-15 billion in investments by the end of 2024.