Bitcoin (BTC) has made a dramatic comeback, soaring to $44,500 on Thursday, as investors seemingly dismiss concerns over a recent flash crash. Optimism is high, fueled by expectations of an imminent approval of a U.S. spot BTC exchange-traded fund (ETF) by the Securities and Exchange Commission (SEC).
Despite a Wednesday report from Matrixport hinting at potential rejection and causing a brief 10% drop in Bitcoin’s value, the majority of market watchers remain hopeful.
The SEC’s pending decision, which could come as soon as Friday according to Bloomberg ETF analyst Eric Balchunas, is anticipated to be a turning point. TechCrunch’s Jacquelyn Melinek further fueled optimism with reports of multiple impending approvals, citing highly informed sources.
heard from sources extremely close to the matter that the bitcoin spot ETF is going to be approved by the SEC for *multiple* firms' applications
— Jacquelyn Melinek (@jacqmelinek) January 4, 2024
At the heart of the rebound, Bitcoin wiped out the losses from the previous day, trading robustly at $44,500. The market’s resilience reflects the growing anticipation for spot-based Bitcoin ETFs, which promise a more direct investment in the digital asset compared to the futures-based counterparts.
The sentiment surged when BlackRock, a Wall Street titan, submitted its application in June, leading to a wave of similar filings. Despite the upbeat mood, a recent Bitwise and VettaFi survey indicates a more cautious outlook among financial advisors, with only 39% expecting a spot BTC ETF approval this year.
The same survey, however, reveals a striking consensus: 88% of advisors believe a spot Bitcoin ETF would be a significant market catalyst and express interest in investing post-approval.
The market is closely watching Bitwise and other asset managers as they await the SEC’s decision. The implications extend beyond Bitcoin; the crypto community is already setting its sights on Ether (ETH).
Markus Thielen of Matrixport, despite his cautionary report, predicts the U.S. will eventually embrace spot-based ETFs. Thielen suggests that Bitcoin might face downward pressure in the short term due to faltering technical indicators. Yet, he believes the focus will soon shift to Ethereum’s Ether, with expectations of a decision on spot-based Ether ETFs by May.
As the crypto industry stands on the brink of potentially transformative regulatory approvals, the market’s mood oscillates between caution and optimism. The coming weeks promise to be pivotal, with implications not just for Bitcoin and Ether but for the broader landscape of digital assets and their integration into mainstream finance.
