Bitcoin Price and the Impact of Spot Bitcoin ETF Approvals
The price of Bitcoin (BTC) is expected to undergo a correction once spot Bitcoin exchange-traded funds (ETFs) are approved, according to analysts. However, they also acknowledge that the cryptocurrency market is unpredictable and can be a “wild card”.
Bitcoin has experienced significant momentum over the past 11 months, with notable jumps in March, June, and October. On December 3, Bitcoin reached its highest level in 19 months, surpassing the $40,000 mark.
Sell the News Event
James Edwards, a cryptocurrency analyst at Finder, believes that the approval of a spot Bitcoin ETF would trigger a sell-off event. He compares this situation to the phrase “buy the rumor, sell the news”, where an asset rises in anticipation of positive news or events, but falls once the news is confirmed or the event occurs.
Edwards explains that it is unlikely that institutional investors will immediately jump in once the ETF is approved. He suggests that it could take months or even years before significant inflows occur.
Crypto is a “Wild Card”
Despite the expectation of a correction, some analysts, including Ryan McMillin, the chief investment officer at Merkle Tree, believe that the spot Bitcoin ETFs are highly anticipated and any sell-off will be quickly bought up. CK Zheng, co-founder of cryptocurrency investment firm ZX Squared Capital, expects any price pullback to be shallow. He cites various factors, such as upcoming BTC halving, global central bank money printing, and geopolitical uncertainty that support the fundamentals of Bitcoin.
Even Edwards acknowledges that cryptocurrency is unpredictable, and while a correction may be logical, it does not necessarily mean it will happen in the crypto market.
Analysts do not foresee Bitcoin losing steam in December. Early signs of institutional investors speculating on ETF approval have been observed, with increased inflows to existing Bitcoin futures ETFs. Joe Carlasare, a crypto lawyer, also sees little chance of a serious Bitcoin correction before ETF approval.
The industry is eagerly awaiting a potential approval window for spot Bitcoin ETFs between January 5 and 10, 2024.
Mainstream Focus on the Cryptocurrency Market
A mass spot Bitcoin ETF approval could refocus mainstream attention on the cryptocurrency market, according to Henrik Anderrson, Chief Investment Officer at Apollo Capital.
Overall, while a correction may be expected with spot Bitcoin ETF approvals, the market remains unpredictable. The industry is eagerly awaiting the approval window, which could have a significant impact on the future of Bitcoin.