At this point, spot Bitcoin ETF approvals are a foregone conclusion. It is not a matter of if but when the SEC will finally greenlight them; at least, this is what most experts believe. It could be any day now, Investors Business Daily reported Tuesday:
“Regulatory approval of spot bitcoin ETFs is likely in the next few days. The SEC issued final comments to applicants late Monday and asset managers hustled to submit responses as of early Tuesday.”
However, another important question for cryptocurrency markets is whether official approval will be a buy or sell-the-news event for Bitcoin prices. That’s because liquid markets reward participants who are early in future expectations that come to pass.
Expectations of a round of Bitcoin exchange-traded fund approvals have run high for weeks. As a result, it is possible the news is already priced in.
Here’s what two experts think.
Bitcoin ETF: Buy The News Event
Alex Becker, CEO of Hyros, an AI trading company, recently told his 923,000 followers on X, formerly Twitter:
“The reason the ETF is not a sell the news event is simple.
Self custody.
Say you’re a retiree, pension fund, financial manager.
Most people (including me) don’t feel comfortable self custodying millions (or tens).”
“Aka, this isn’t a sell the news. It’s a beginning of steady flow into the asset from the largest holders of wealth in the world,” Becker concludes.
The reason the ETF is not a sell the news event is simple.
Self custody.
Say you’re a retiree, pension fund, financial manager.
Most people (including me) don’t feel comfortable self custodying millions (or tens).
There’s no way they are just gonna leave their money on say…
— Alex Becker ?????? (@ZssBecker) January 7, 2024
ETF Approval: Sell-The-News Event
But Senior Analyst Vetle Lunde from K33 Research, a cryptocurrency intelligence firm, says there is a 75% chance a Bitcoin ETF approval will be a sell-the-news event:
“Everything points towards traders being considerably exposed ahead of the verdict, with derivatives pushing massive premiums following BTC’s last three months of continuous upside momentum. A sell-the-news event could become a self-fulfilling prophecy as a non-significant share of short-term market participants has eyeballed the event as an area for profit taking.”
“I expect the current rally to peak at the verdict date due to sizeable profit-taking from short-term traders and will exit my BTC long held from September to early January,” Lunde concludes.
The same sentiment was by a few other crypto experts, including the analysts from CryptoQuant. Jurrien Timmer, Fidelity’s director of global macro, also weighed in on the matter, but he believes it’s not a simple yes-or-no question.
