Jan. 2 SEC may approve Bitcoin ETF: How will the crypto market react?
Jan. 2 SEC may approve Bitcoin ETF: How will the crypto market react?
Exciting reports about the imminent launch of the first spot Bitcoin ETF in the U.S. are making Bitcoin investors and all crypto market participants impatient.
The U.S. SEC could approve Bitcoin ETFs as early as Tuesday, January 2, for companies that file amended applications within the deadline set by the regulator.
However, this news did not cause a strong rally in cryptocurrencies; the market has so far noted only a slight volatility, reports CoinGape.
Most likely, experts believe that the market has already taken into account and priced in the prospects for the introduction of the Bitcoin ETF, so there will not be an explosive rally.
Options data from Grecs.Live points out that even exciting rumors about the SEC's imminent approval of applications for a spot Bitcoin ETF on Jan. 2 have not thrown the market off balance. There is minimal volatility in major-term implied volatility (IV) and cryptocurrency prices.
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Based on this option data, experts conclude that the expected volatility for ETF-related options has actually declined. The trading volume for options was much lower, at only 2% of the total daily turnover.
Thus, the market has already reacted to and priced in the potential ETF approval, so the approval of a spot Bitcoin ETF may only cause a slight price increase. Options data shows subdued activity, suggesting that the expected approval is priced in. The crypto market will not see a spectacular rally, and the potential for investors to make profits is severely limited.
Bitcoin's slight bounce on the news of the imminent possible approval of a Bitcoin ETF only saw it rise by 1.2%. At the time of writing, the price of bitcoin is hovering around $42,466.
The crypto community is surprised to see that even optimistic news from the SEC will not be a strong stimulus for a sharp rise. Analysts are expecting a moderate increase in value.
Prominent crypto analyst Michael Van de Poppe is confident that despite the news about the possible approval of a spot ETF, Bitcoin's growth potential is limited. According to him, a scenario in which BTC ends up in the range of $48,000 to $52,000 is more likely. After this peak is reached, there will be a period of calm and a sideways trend with limited movement. But by the end of 2024, the major cryptocurrency will be at a new all-time high (ATH).
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The crypto expert's opinion confirms a cautious approach to Bitcoin's price movement, given the market's reaction to the approval of the spot ETF. Nonetheless, Van de Poppe predicts a measured and potentially stable period for BTC before a resurgence to new record highs in the future.
Earlier, analysts predicted that Bitcoin's bull cycle would continue
