Bitcoin is Getting Ready to Welcome the Bitcoin Spot ETFs
Even though Bitcoin’s price dropped sharply during the first of 2024, the price immediately recovered and reached above $47,000 at the beginning of the second week. The reason why the price has pumped so high is that the odds of Bitcoin spot ETF approval have increased by 90%.
The following Bitcoin weekly news may provide more information about how Bitcoin’s price will behave over the coming days.
Fake News About Spot Bitcoin ETFs Approval
Following the false social media post from the SEC, Bitcoin’s price jumped significantly and reached a level of $47,900. However, the price immediately declined to $45,100 when SEC Chair Gensler denied the news saying that SEC’s X account was compromised. Even though it was fake news, it severely damaged the derivative traders by liquidating more than $50 million within an hour.
Following this incident, most traders would probably wait for the genuine approval news before jumping into a trade. At the same time, some experts are recommending investors to shift to Ethereum to avoid such incidents.
ETF Applicants are Quickly Responding to SEC Requirements
SEC recently made some comments about Bitcoin ETF and the leading entities like BlackRock, Invesco, VanEck, and others submitted updated documents within 24 hours. The applicants have provided detailed information about how they’re going to mitigate damage to shareholders in case of insolvency.
The analysts say that such rapid back-and-forth communication between ETF applicants and the SEC is quite unusual. Some analysts think that it’s a healthy step towards the approval of these applications.
Bitcoin Price Update by Standard Chartered
Standard Chartered has predicted that Bitcoin will potentially reach $200,000 by the end of 2025. However, they’ve tied the prediction to the success of spot Bitcoin ETFs in the United States. If the spot Bitcoin ETFs are approved, the organizations will potentially acquire around 437,000 to 1.32 million BTC tokens to store in their ETFs.
The bank is expecting the ETF approval to be a significant turning point for Bitcoin. If the prediction stands true, Bitcoin’s price will increase around 4.3 times compared to its recent value. On the other hand, some experts have cautioned investors about a price decline if the ETFs are approved.
Bitcoin Price Prediction by Bloomberg Analysts
Although the participants in the Polymarket betting are less optimistic about a Bitcoin ETF approval, two Bloomberg analysts have increased the odds to more than 90%. Eric Balchunas, the Bloomberg ETF analyst, states that the chances of reject by the SEC are now at 5%. It’s worth noting that Eric previously tipped the odds for an ETF approval at 90% in November.
Even though there is some pessimism in the market, a number of analysts and experts are expecting the approval of the first spot Bitcoin ETF in the U.S. following the decisions of the SEC this week. The approval of a spot Bitcoin ETF will attract a huge number of professional investors to this market.
More than a dozen applicants including Grayscale, BlackRock, and Fidelity are awaiting approval from the SEC so they may launch the first spot Bitcoin ETF.
Bitcoin ETF Fee War Updates
In response to the SEC’s comments about ETF fees, most applicants including Invesco, Valkyrie, and Bitwise, have reduced their fees. It means they’re all getting ready to compete with other issuers once the ETFs are approved. Invesco has reduced its fee to 0.39% and Valkyrie has reduced its fee to 0.49.
At the same time, Bitwise has reduced its fee to 0.20%. It’s worth noting that Bitwise was already offering low fees but they’ve reduced it even further to stay ahead of others. The interesting part is that Grayscale has refrained from reducing its fees while it’s one of the issuers that are offering higher fees.
Grayscale seems to be confident about its position in the ETF race. However, some analysts think that Grayscale will gradually reduce its fees to hand the AUM (assets under management) decline. Grayscale currently has a fee of 1.5% whereas nine out of ten applicants are going to charge less than 0.5% fees.
Bitcoin Weekly Technical Analysis
Bitcoin’s price has consistently moved toward the upside since the beginning of September 2023. From the weekly point of view, the price needs to be discounted for some time to continue the upward momentum. The enthusiasm about Bitcoin ETF approval may push the price a little higher. However, the investors may expect some price decline before the next upside move.
On the daily chart, the price has been struggling for more than a month. It’s gradually moving towards the $48,200 level that was mentioned several times in Bitcoin weekly analysis. The price may decline after breaking out of this resistance level. So, the investors need to manage their portfolios cautiously.
Conclusion
Bitcoin’s recent price fluctuations, driven by speculation around spot ETF approval, highlight the market’s sensitivity to regulatory news. The fake news incident underscored the risks, causing a rapid price drop. Despite hurdles, major ETF applicants are responding swiftly to SEC requirements, signaling potential progress.
Standard Chartered predicts a substantial price increase with ETF approval, while Bloomberg analysts raise approval odds. The ongoing fee war among ETF issuers reflects their readiness for competition. Investors should remain vigilant, considering potential market fluctuations, as the industry anticipates the approval of the first spot Bitcoin ETF in the U.S.
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