The Bitcoin Spot ETF Approval
The Blockchain Sector @ 2023-12-01
On Tuesday the SEC delayed the Franklin Bitcoin ETF application which had a January 1st 2024 deadline.
As we move into the start of December it’s looking less and less likely we will see a 2023 approval of the first wave of Bitcoin spot ETF’s. However industry sentiment is still adamant that it’s a matter of when not if now.
Bloomberg analysts James Seyffart says “the window for spot BTC ETF approvals ranges between January 5 and 10, 2024”*
Scott Johnsson on the Franklin delay “They might have chosen to do this early so they could have the comment period end before Jan 10, in order to approve everyone at the same time”*
Hester Peirce, everyone’s favorite SEC commissioner, said in an interview with Bloomberg “There is no reason for us to stand in the way of a spot Bitcoin exchange-traded product. We’ve had a number come before us where I said I don’t see the reason that we’re denying these. We got a little bit of a nudge from the court, and we’ll see where things go from here.”
Bottom line here is I think the market is right and we should see BTC ETF’s in the near future.
Is The Bitcoin Spot ETF A Sell The News Event?
In my opinion the spot ETF wont be a sell the news event. It’s unlikely to get frontrun unless the SEC has information leaks which would be an embarrassment to the organisation.
We saw recently when the Cointelegraph twitter intern posted out fake news that the initial reaction is going to be positive.
Once the short-term trade has died off I think the narrative has legs due to an increase in demand from opening up new markets.
The Bitcoin ETF will be a significant news story and talking point across traditional finance. It opens up the digital asset to any fund, prop firm or family office that has access to the New York stock exchange. It will be seen as a safe way to gain access to digital assets and the crypto economies.
The ETF’s are expected to fill up over the first few months. This will create demand on exchange and potentially significant buying from large sums of institutional capital.
The excess demand comes at a time when the supply is about to get cut in half due to the Bitcoin halving which takes place in late April 2024.
All these things combine to create the most interesting period in Bitcoin’s history right at a time when we are at a critical juncture in the four year cycle.
When Ethereum Spot ETF?
Blackrock and Fidelity among others have filed for an Ethereum Spot ETF as well. The general consensus is that this will come later than the Bitcoin ETF approval but there’s nothing standing in the way.
Some chance that there’s a rotation out of BTC and into ETH to capture that market dynamic during or immediately following the Bitcoin spot ETF approval.
I’d expect many market participants who have risked off into stables and BTC during the bear market (if you can call it that since we’ve been up only this year) to do something like this:
Capture BTC momentum > Rotate to ETH & other L1’s > Move up the risk curve
Worth paying close attention to both ETH/BTC and BTC.d charts and not getting caught offside. Any move above 0.06 on ETH/BTC and it’s off to the races. I’d also expect altcoins and other risk on digital assets to outperform and play catch up during and following any significant move in ETH/BTC.
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