As Bitcoin price regains previously lost territory, reports suggest that the US Securities and Exchange Commission (SEC) will reject the long-awaited Bitcoin spot exchange-traded fund (ETF), The new development has raised hopes among investors.Thank you for reading this post, don't forget to subscribe!
Although these index funds are not expected to get approval on Friday, sources say that the coming week may bring positive news.
ETF approval will gradually push Bitcoin price to $500,000
Fox journalist Eleanor Terrett reports that amendments to 19b-4 filings and comments on S-1s and last-minute phone calls regarding potential launch dates are expected in the coming days.
While approval is likely in the next week according to Terrett, the timeline ultimately depends on the SEC’s ability to efficiently review submitted comments and amendments.
Terrett described the current situation as a meticulous process of “dotting the i’s and crossing the t’s”, with an emphasis on attention to detail required for regulatory approval.
On the other hand, crypto analyst Adam Cochrane provides valuable insight into the potential impact of Bitcoin ETFs, as all signs point towards the imminent approval of these investment products.
Cochran suggests that many may “overestimate” the short-term effects of ETF approval while underestimating its long-term effects. Immediately thereafter, no significant surge in market flows could be seen. However, Cochrane believes investment advisors will review their clients’ portfolios over the next year and recommend diversifying even small percentages, such as 1%, into ETFs.
Cochrane emphasized that Bitcoin price performance, with a remarkable 157% return in the latter half of 2023, will be a major factor driving investor interest.
Cochrane envisions a gradual upward trajectory for the price of Bitcoin, characterized by steady growth and occasional market volatility.
Ultimately, Cochrane’s long-term forecast points to a potential price of Bitcoin rising to $500,000 per coin, leaving marginalized investors regretfully waiting for a major market correction. Cochran further said:
Additionally, ETFs result in spot purchases, not leverage, which improves system health. And the longer term holders are, the less likely they are to sell volatility. So this creates a slowdown in the underlying market health. Like the best DCA you could ask for.
Bitcoin ETF Pricing Potential Has Not Been Fully Realized
Crypto analyst Ali Martinez suggests that the pricing potential of Bitcoin ETFs has not been fully realized, providing insight into the current state of the Bitcoin market.
Martínez pointed to a decline in the estimated leverage ratio across all exchanges, which has hit a two-year low. This indicates that Bitcoin traders are taking a more cautious stance, making less use of borrowed funds as they await regulatory clarity on the ETF.
Furthermore, Martinez stressed the importance of Bitcoin price above $41,800. According to Martinez, Bitcoin’s ability to maintain its position above $41,800 is key to establishing a bullish outlook.
This level is reinforced by approximately 2.41 million addresses holding more than 1 million BTC, forming a substantial support zone.
The significant number of addresses with substantial Bitcoin holdings suggests a strong interest in maintaining the value of the cryptocurrency and provides a foundation for market stability. Martínez noted that further resistance levels appear relatively low for Bitcoin. This means that less significant headwinds are hindering potential price growth.
With less resistance, market conditions become more favorable for stable or rising prices, further supporting bullish sentiment.
Featured image from Shutterstock, chart from tradingview.com
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