The emergence of a spot Bitcoin ETF is increasingly taking shape. For several experts, this perspective is excellent news for the revival of the bitcoin (BTC) market and more generally the crypto industry. Some specialists are much more reserved about this possibility.
Approval of a Bitcoin ETF does not guarantee recovery of the crypto market
Many crypto investors are impatient with the emergence of a spot Bitcoin ETF. Indeed, this prospect makes them hope that the price of bitcoin (BTC) will soar to new heights.
It is nevertheless vital to recognize the following fact. Certainly, the approval of a spot Bitcoin ETF could actually boost the price of the asset. However, this does not ensure the recovery and maintenance of a crypto bull market.
On October 24, for example, the price of bitcoin experienced an astonishing rise. In a single day, the crypto gained more than 14% in valuation. An increase triggered by the listing of BlackRock’s Bitcoin ETF, by the Depository Trust & Clearing Corporation (DTCC).
The market reacted positively to this development, reflecting impatience for ETF approval. Interestingly, this rise was even stronger than that of October 16, caused by misinformation suggesting the approval of a Bitcoin ETF.
For trader TheFlowHorse, these two events provide insight into what would happen if a spot Bitcoin ETF were approved. According to him, we could then witness a similar if not much greater price movement.
The experts’ point of view
James Seyffart and Eric Balchunas, two specialists in ETF issues, believe thatyou have to know how to keep reason. Despite this optimistic outlook, investors should be cautious about their expectations.
Because, they explain, the demand for bitcoins generated by the approval of the ETF could only be ephemeral. Not to mention that high interest rates and prevailing macroeconomic factors can influence investors’ decisions.
These elements may thus weigh on the long-term impact of approved spot Bitcoin ETFs. And we don’t even add to this data the fact that the transformation of bitcoin into a sustainable bull market is less likely.
This is due to the impact of high interest rates on the attractiveness of alternative investments. For these experts, this is a crucial factor that could compromise the ability of ETF approval to support a prolonged rise in prices.
Additionally, they note, one must take into account that the market may have already priced in the effect of the approval of a spot Bitcoin ETF. Despite everything, analysts, notably those at JPMorgan, anticipate the approval of a spot Bitcoin ETF in the coming weeks. Potentially by January 10, 2024.
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