Spot Bitcoin ETF Approval May Prompt Short-term BTC Price Drop, Predicts ARK Invest CEO
Summary:
ARK Invest CEO, Cathie Wood, cautions that BTC prices may face temporary downturn following the approval of spot Bitcoin ETFs, as some investors might choose to 'sell on the news.' However, she underscores the long-term benefits, providing an easy conduit for institutional investors to access BTC. She further speculates that even minor allocations by these entities could cause Bitcoin prices to soar, given its limited supply. She expresses optimism about a possible approval of the spot Bitcoin ETF by the U.S. Securities Exchange Commission in January.
The potential authorization of Bitcoin (BTC) spot exchange-traded funds (ETFs) is sparking speculation that could briefly affect the BTC's value, as per CEO of ARK Invest, Cathie Wood. There could be potential market fluctuations as investors may decide to "cash in on the news" when a spot BTC ETF gains approval from U.S. security regulators, suggested Wood. The surge in interest ahead of the event has led her to believe that some investors might seize the chance to monetize.
Wood asserted in a conversation with Yahoo Finance on December 26th that some, who have been benefitting from the noteworthy profits, would likely sell as the news breaks out; a known trader tactic to anticipate an event, inflate the price and then sell as the news unfolds. Despite the possible short-term reactions, Wood emphasizes the optimistic view for the long term.
In her words, the Securities Exchange Commission (SEC) sanctioning the spot Bitcoin ETF catalyzes institutional investor involvement and is deemed more consequential. This approval provides an open avenue for such bigger entities to dedicate a minor part of their massive funds to Bitcoin, further expounded by Wood, who presumes the value of Bitcoin to rocket if institutions devote even 0.1% or 0.2% of their substantial funds into Bitcoin, which is limited to 21 million coins.
ARK Invest, spearheaded by Wood, is one of the 14 entities attempting to gain SEC's approval for a spot Bitcoin ETF, with their ARK 21Shares Bitcoin ETF being the result of a collaborative effort with 21Shares, a European company specializing in crypto exchange-traded products. Amid their latest interaction, she highlighted the insightful and technical questions presented by SEC, countering their former dismissive stance, which, according to Wood, indicates a positive progression. She remains hopeful about the approval of the first spot Bitcoin ETF possibly by January 10th.
Published At
12/27/2023 12:50:18 PM
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