While the approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) could push Bitcoin’s price higher, some analysts worry it won’t be enough to completely shake the market out of the winter chill.
On October 24, with the news that BlackRock Spot Bitcoin ETF (IBTC) was listed on the website of the Depository Trust and Clearing Corporation (DTCC), Bitcoin experienced its largest single-day rise in more than a year. More than 14%. The market sees this as a positive step forward for fund applications.
This rally has proven to be even stronger than in October. On the 16th, Cointelegraph posted an erroneous tweet suggesting that a spot Bitcoin ETF had been approved.
TheFlowHorse, an anonymous trader with 184,000 followers on
Speaking about both developments and their impact on Bitcoin, Horse added that investors could see “the same or even greater” volatility if the ETF is approved.
However, Horse noted that while approval could provide a significant boost to prices, there is also the possibility of an eventual retracement in the medium term.
In Horses’ view, that’s because deals will be packed with eager investors chasing the news.
“You’re going to have a lot of congestion … and it’s ultimately an inefficient move. Inefficient moves will be replenished and rolled back to some extent,” he added.
IG International analyst Tony Sycamore told Cointelegraph that he expects Bitcoin to continue to surge to new yearly highs on the day of the announcement, while Rachel Kass, a technical analyst at Australian cryptocurrency exchange BTC Markets Lucas, said BlackRock’s approval of the ETF would be a catalyst for other areas of traditional finance.
“This participation not only amplifies institutional capital inflows, it also heightens retail curiosity, leading to supply constraints and highlighting the deflationary aspects of Bitcoin.”
this is a short film @kaileyleinz Ask Gensler $GBTC and other locations #bitcoin ETF. I think it was left unanswered for the most part, but it did talk about the disclosure review team.In recent days, we have gained some understanding of their processes through the modifications made by some of the filers. pic.twitter.com/lIWZc74OAi
— James Seyff (@JSeyff) October 18, 2023
However, while Sycamore said “the rally is likely to continue,” a full trend reversal for Bitcoin seems unlikely given that interest rates remain well above where they were when Bitcoin hit its all-time highs.
CMC Markets analyst Tina Teng also believes that taking a more cautious stance is worthwhile because there is no guarantee that the trend will reverse completely.
“Bitcoin still lacks the fundamentals to support quantitative valuations like stocks, nor does it have the same scope of use as commodities. The SEC’s approval cannot change its nature as a speculative asset.”
“Macro changes will have a significant impact on the cryptocurrency market, which typically begins to form an upward trend during the Fed’s rate cut cycle,” Teng concluded.
related: Grayscale files for new spot Bitcoin ETF on NYSE Arca
The certainty and timing of spot Bitcoin ETF approval remains controversial. While unlikely, SEC Chairman Gary Gensler could wait until the last minute to make a “surprisingly sadistic” rejection of an upcoming filing, ETF analysts said.
And analysts at J.P. Morgan claim Bloomberg ETF analysts James Seyffart and Eric Balchunas said in an investment note on Oct. 17 that approval could come within the next few months, while the general consensus is that there is a 90% chance of approval by Jan. 10 next year. .
I get a lot of questions about my current thoughts on Spot #bitcoin ETFs over the past few weeks.This is the first part of the note I posted yesterday @ericbalciunas.
TLDR: Our views haven’t changed much pic.twitter.com/Htsi3n2XxV
— James Seyff (@JSeyff) October 13, 2023
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