Bitcoin Community on Edge as Decision on Exchange-Traded Funds Looms
Summary:
As the decision on Bitcoin exchange-traded funds (ETFs) approaches, the cryptocurrency community is preparing for potential changes. The verdict, expected on January 10, 2024, could allow the first spot Bitcoin ETFs to start trading. This date also marks 15 years since Hal Finney's famed "Running Bitcoin" tweet. Notably, Bloomberg ETF analyst predicts that approvals for spot Bitcoin ETFs could occur later today, between the late afternoon and early evening hours, prompting the first spot Bitcoin ETFs to start trading as early as tomorrow. Amid these developments, Bitcoin's price briefly dipped below $45,000 and financial institutions like Standard Chartered projected Bitcoin's price growth, provided ETFs are approved and successful. However, the U.S. SEC Chair has issued a warning for crypto investors due to "serious risks" associated with such investments.
The Bitcoin community is on alert as the decision about Bitcoin exchange-traded funds (ETFs) draws near. Long-anticipated verdict regarding the commencement of spot Bitcoin ETF trading is expected to be released on January 10, 2024. Speculations have been on the rise regarding the potential influence of impostor approval news by US securities regulators. The exact date of potential ETF approval interestingly coincides with the 15th anniversary of Hal Finney's notable "Running Bitcoin" tweet. According to VanEck's strategist Gabor Gurbacs, this alignment is not accidental.
The possible green light for spot Bitcoin ETF is expected today somewhere between 4:00 pm and 6:00 pm ET, said Eric Balchunas, Bloomberg ETF analyst. If approvals are granted, the first spot Bitcoin ETFs could kick off trading as early as January 11. Such prediction surfaces amidst worries regarding another possible delay, this time due to the SEC's fraudulent ETF approval news that was released, apparently due to a breach of their Twitter account. Sceptics have speculated that the recent security lapse could be used as another roadblock to postpone ETF approval, although most regard this as unlikely.
Bitcoin's price temporarily dropped below $45,000 as the decision about ETFs hangs in the balance, fluctuating at around $45,082 at the time of writing. In spite of the current trends, Bitcoin has experienced around a 6% increase over the past week, although it is still 51% down from its peak of $68,000 in November 2021.
Concurrently, in the first week of 2024, Bitcoin short ETPs recorded a weekly outflow of $1 million while digital asset investment products or ETPs received inflows of $151 million. Despite previous predictions that the ETF approval could result in a "buy the rumor, sell the news" situation, current data regarding investment flow in digital assets deflects that expectation, showcasing significant outflows in recent weeks.
Crypto Fear & Greed Index has indicated "extreme greed" as the prevailing sentiment among crypto investors, though this sentiment has seen a minor drop on the day of potential Bitcoin ETF approval. This dip in sentiment suggests a slight reluctance among investors to purchase more Bitcoin.
Banking giant Standard Chartered forecasted that Bitcoin could reach nearly $200,000 by late 2025, if the Bitcoin ETFs see approval and success as investment products. The bank's prediction is based on the assumption that U.S. listed spot Bitcoin ETFs would hold between 437,000 and 1.32 million Bitcoins by the end of 2024, equating to between $50 billion and $100 billion in inflows.
However, not all asset managers were included in the latest S-1 form amendments relating to spot BTC ETF fund listings on U.S.-based exchanges; notably, crypto asset management company Hashdex was excluded. Their Bitcoin ETF application was unique in proposing a conversion of an existing crypto futures ETF.
Ahead of potential spot Bitcoin ETF approval, U.S. SEC Chair Gary Gensler has issued words of caution for crypto investors, citing "serious risks" surrounding crypto investments, sans specific mention about potential ETF approval. Amid the uncertainties regarding the SEC's decision, multiple financial firms have submitted their applications for Bitcoin ETFs.Included in this list are Valkyrie, WisdomTree, BlackRock, VanEck, Invesco, Galaxy, Grayscale, ARK Invest, 21Shares, Fidelity, Bitwise and Franklin Templeton.
These firms were seen filing S-1 forms on Jan. 8, 2024, as anticipated, setting a deadline for the SEC after several 19b-4 filings were made on Jan. 5. These developments indicate that the SEC might be working towards allowing crypto ETF listings on U.S. exchanges, however, they are not definitive proof of approval. This article features some updates including a recent post from SEC Chair Gary Gensler.
Published At
1/10/2024 5:00:03 PM
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