A new warning suggests that Bitcoin (BTC) may be affected when the United States approves the first spot exchange-traded fund (ETF).
in a Wire On November 28, Joshua Lim, head of derivatives at capital markets company Genesis Trading, predicted on X (former Twitter) that BTC price trends will be volatile in 2024.
Bitcoin ETF Approved: Retail Sector May Continue to Hold Funds
Lim said Bitcoin has become a target for traditional finance, known as “TradFi”, which is betting on receiving large sums of money from the approval of spot ETFs.
“We know tradfi folks/macro tourists were already long crypto before the ETF news, they built the position over the past few months and are now paying handsome fees to roll it,” the post said, covering CME Group Bitcoin open interest data explains futures together.
“Trader commitment data shows asset managers have increased their holdings by about $1 billion since the end of September.”
This sign is reflected in the performance of the first-ever Bitcoin futures ETF (BITO), which is up 250% year-to-date, as well as shares of cryptocurrency companies such as U.S. exchange Coinbase (COIN).
Despite the buzz and encouragement of institutional adoption behind Bitcoin, the event could quickly fizzle out once spot ETFs are actually approved. Lin and others believe this will be a classic “buy the rumor, sell the news” incident.
“What does this mean?” he asked.
“Tradfi is already long and may consider when to exit the trade when the ETF announcement is made, anticipating an influx of retail investors… and expecting tradfi personnel to exit (the top of the basis in 2021 is before COIN and BITO are listed).”
Gold ETF repeat?
Lim isn’t the only one wondering whether ETF approval day will ultimately put ordinary investors at a disadvantage.
Related: ‘Looking Ahead’ Bitcoin Indicator Looks at ETF Price Around $48,000 BTC
respondJames Straten, a research and data analyst at cryptocurrency insights firm CryptoSlate, looked to history to support these concerns.
“When the Gold ETF (GLD) launched in November 2004, it opened at around $45 and fell to around $41 by May 2005. However, over the subsequent seven years, it has risen by an astounding amount. An impressive 268%,” he Add to In CryptoSlate analysis on November 28th.
In a more upbeat mid-term report, popular trader Jelle said this week’s news reports, including the $4.3 billion settlement between the U.S. government and the world’s largest cryptocurrency exchange Binance, have not dampened institutional interest. .
He emphasized that CME futures continue to trade higher than Bitcoin spot prices.
Interestingly, throughout the courtroom drama, the agency builds #bitcoin.
CME is currently trading at a premium of over $350 to Bitfinex spot prices and has been trading at a premium for over a month pic.twitter.com/TAZDm6IABd
— Jelle (@CryptoJelleNL) November 28, 2023
This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should do their own research when making decisions.
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