The cryptocurrency market seems to be vastly underestimating the potential impact of Spot Bitcoin ETF approval. As the battle for regulatory approval continues, experts are increasingly bullish about the transformative effect these financial instruments could have on the crypto landscape. In a recent report, Velte Lund, a senior analyst at K33, asserts that failing to accumulate BTC aggressively at its current price levels would be an imprudent decision.
Spot Bitcoin ETF Approval: A Potential Market Catalyst
Analysts at the crypto research firm K33, formerly known as Arcane Research, contend that the crypto market is significantly undervaluing the potential impact of a spot Bitcoin exchange-traded fund (ETF) approval, which has the potential to drive BTC prices higher. In their market report dated September 5th, K33’s senior analyst Vetle Lunde and vice president Anders Helseth highlighted that the past three months have notably increased the likelihood of a spot Bitcoin ETF receiving approval. However, they observed that this positive sentiment has not yet been reflected in the pricing of Bitcoin and other prominent cryptocurrencies.
The analysts clarified that even though Bitcoin had almost surrendered its previous gains following Grayscale’s legal triumph against the Securities and Exchange Commission, an approval would “draw in substantial capital inflows” and notably amplify the demand for Bitcoin.
Potential ETF Rejection: Limited Impact on the Bitcoin Market
Nonetheless, Lunde and Helseth pointed out that in the event of a potential rejection of a spot ETF, the adverse consequences would be “insignificant,” and Bitcoin prices would continue along their regular trajectory, as per their analysis.
They further emphasized that considering the growing probability of Spot Bitcoin ETF approval, supported by predictions from several Bloomberg analysts suggesting a 75% likelihood of approval within the year, the market’s current perspective on ETFs is fundamentally flawed.
“I firmly believe the market is wrong. This is, by all accounts, a buyer’s market, and it’s reckless not to aggressively accumulate BTC at current levels.”
Reinforcing their optimistic forecast, the analysts pointed to the recent 2% increase in the Nasdaq-100 index, which is frequently considered an indicator of the broader market’s willingness to take on risk.
Ethereum (ETH) poised to surpass Bitcoin (BTC) in performance
Lunde and Helserth expressed their positive outlook on Ethereum’s (ETH) price, stating that ETH is poised to outperform Bitcoin in the coming two months. They attribute this potential outperformance to Ethereum’s robust momentum leading up to the introduction of a futures-based ETF.
They suggested that Ether might follow a trajectory similar to Bitcoin, which witnessed an approximately 60% surge in the weeks preceding the introduction of the inaugural Bitcoin futures-based ETF on October 19, 2021. The decision regarding a futures-based Ethereum ETF is anticipated to be announced in mid-October and is expected to receive approval from the SEC, according to reports.
In the coming months, the crypto market should closely monitor regulatory decisions, as they have the potential to unlock substantial value and reshape the industry’s future. Spot Bitcoin ETFs and the evolving crypto landscape are on the cusp of making history, and market participants should be prepared for a paradigm shift.
The crypto market’s attitude towards spot Bitcoin exchange-traded funds (ETFs) may be undergoing a significant underestimation of their potential impact. As the crypto landscape continues to evolve, it’s essential to recognize the transformative power that Spot Bitcoin ETF approval could wield. These financial instruments not only offer a secure and regulated gateway for institutional investors but also hold the promise of attracting substantial capital into the cryptocurrency market.
While regulatory hurdles have been a major roadblock, recent developments indicate a growing acceptance of the crypto industry’s maturity. The approval of Bitcoin futures ETFs in the United States has been a positive step in this direction. Furthermore, the optimism surrounding Ether’s performance, especially in light of a potential futures-based ETF listing, adds another layer of excitement to the market. Ethereum’s ability to outperform Bitcoin, as seen historically, could usher in a new era for the second-largest cryptocurrency.