- The SEC might soon approve a Bitcoin ETF, but there’s a fear that investors may sell their Bitcoin, causing the price to drop.
- Concerns over market manipulation have made the SEC cautious about approving Bitcoin ETFs.
As the U.S. Securities and Exchange Commission (SEC) approaches a decision about approving a Bitcoin Exchange-Traded Fund (ETF), the cryptocurrency market is in a flurry of anticipation. Analysts are closely monitoring the situation, suggesting that while approval seems likely, it may not necessarily lead to an immediate surge in Bitcoin’s price.
Blockchain data firm CryptoQuant has voiced caution, suggesting that the approval of a Bitcoin ETF could trigger a “sell the news” event. Given that they have already made large gains in the lead-up to the anticipated launch. Notably, investors may choose to take advantage of this opportunity, which might result in a sharp decline in the price of Bitcoin.
CryptoQuant’s study indicates that this decline might result in a drop in the value of Bitcoin from its present price of roughly $42,539 to as low as $32,000 per coin.
📉 According to #CryptoQuant, #BitcoinETF approval might lead to a "sell the news" event, potentially sending #BTC tumbling to $32,000 next month. Hold onto your hats, it's gonna be a bumpy one! 🎢💥 #CryptoQuant #BitcoinETF #CryptoCorrection 📈📉 pic.twitter.com/40cnVSMxTJ
— Marcel Knobloch aka Collin Brown (@CollinBrownXRP) December 29, 2023
High Expectations Surround ETF Approval
Bloomberg Intelligence analysts have set the odds of the SEC approving by January 10, 2024, at a staggering 90%. A Bitcoin ETF, if approved, would offer traditional investors a convenient means of gaining exposure to cryptocurrency without the complexities of directly owning or storing digital assets.
Latest snapshot of The ETF Cointucky Derby w new column for "AP Agreement" as SEC wants AP (who is also underwriter) named in next S-1 update (coming in next 10 days). This is no easy last step, and may keep some from starting gate. AP agreement + cash creates = approval @JSeyff pic.twitter.com/e8cgCuUBLN
— Eric Balchunas (@EricBalchunas) December 22, 2023
The SEC is reluctant to approve a Bitcoin ETF because it worries about market manipulation in the cryptocurrency industry. However, major Wall Street firms have expressed interest in releasing their own Bitcoin ETF products by submitting applications to the regulatory body, including BlackRock, the largest asset management in the world.
In a report from October, CryptoQuant previously conjectured that accepting a spot Bitcoin ETF might cause a significant inflow of new capital into the cryptocurrency market. This can significantly increase the market value of all cryptocurrencies from the $832 billion it is already at to a whopping $900 billion.
Market participants have expressed varied sentiments regarding the potential approval of a Bitcoin ETF. The co-founder of the trading platform DecenTrader, Filbfilb, has issued a warning against making unduly optimistic price projections. In his opinion, the rivalry to forecast the highest price of Bitcoin after the adoption of the ETF is cause for concern. Filbfilb says that a decline in the price of Bitcoin could be anticipated if first capital inflows into the ETF are weak.
The increasing competition for who’s calling the highest number for Bitcoin when ETF comes along is a red flag.
If initial capital flows are lacklustre expect a correction.
— filbfilb (@filbfilb) December 28, 2023
Bitcoin’s Current Standing
As of this writing, the price of Bitcoin is almost $42,479, which is a slight decrease of 1% over the previous seven days. Still, it shows a respectable 15.75% growth on the monthly chart and a remarkable 158.38% increase over the previous year. These numbers highlight the popularity and durability of the top cryptocurrency as it develops further.
The market is tense as the cryptocurrency industry anxiously awaits the SEC’s decision regarding the Bitcoin ETF. The likelihood of acceptance seems strong, but it’s unclear how the decision will immediately affect the price of Bitcoin. The coming weeks will undoubtedly bring further clarity regarding the cryptocurrency market’s direction.
