- TheFlowHorse added that if the ETF is approved, investors can expect to see “the same or even a larger move.”
- IG International analyst Tony Sycamore said he expects Bitcoin to continue to rise to new yearly highs on the day of the announcement.
- CMC Markets analyst Tina Teng, on the other hand, suggests taking a more cautious approach, as there is no guarantee of a full trend reversal.
While spot Bitcoin ETFs are among the most closely watched topics in the crypto community, their approval may not necessarily mark a bull season for Bitcoin.
Bitcoin ETFs May Not Solve the Crypto Winter
The likely effect of the approval of a spot Bitcoin exchange-traded fund (ETF) on the Bitcoin price may be positive, but some analysts are concerned that it may not entirely thaw the crypto winter.
On October 24, Bitcoin experienced its largest single-day rally in over a year following news that BlackRock’s spot Bitcoin ETF with the IBTC ticker was listed on the Depository Trust & Clearing Corporation (DTCC) website, signaling a positive step for the market.
This rally was even stronger than the rally that took place on October 16 based on a false X post claiming that a spot Bitcoin ETF had been approved. A trader known as TheFlowHorse noted that the two market surges could be seen as a clue to Bitcoin’s price movement when a spot Bitcoin ETF is approved. Examining the two developments and their impact on Bitcoin, TheFlowHorse added that investors could expect to see “the same or even a larger move” when the ETF is approved.
However, TheFlowHorse also pointed out that while the approval is likely to propel prices significantly higher, there is also the possibility of a significant pullback in the medium term. According to TheFlowHorse, the trading that will be heavily crowded by eager investors trying to catch up with the news will eventually become an inefficient move.
“You have a lot of crowd… and that ends up being inefficient. Inefficient moves get filled and somewhat retraced.”
IG International analyst Tony Sycamore, on the other hand, expects Bitcoin to continue rising to new yearly highs on the day of the announcement. Technical analyst Rachael Lucas from the Australian crypto exchange BTC Markets mentioned that BlackRock’s ETF would act as a catalyst for the traditional financial sector, increasing institutional capital inflows, raising retail interest, contributing to supply constraints, and emphasizing Bitcoin’s deflationary nature.
But Sycamore said that while there is a possibility of the “rally sticking,” a full-scale trend change is unlikely due to the significantly higher interest rates at the time when Bitcoin recorded previous all-time highs.
CME Analyst Recommends a Cautious Approach
CMC Markets analyst Tina Teng also suggested taking a more cautious approach, stating that an SEC approval for an ETF cannot change the speculative nature of Bitcoin, as it still lacks the fundamental elements that support quantitative value like stocks and the capacity for use like commodities.
“Major macro shifts that affect all crypto markets usually start to form an uptrend during a period of Fed rate cuts.”
The certainty and timing of the approval of a spot Bitcoin ETF remain debatable. According to ETF analysts, SEC Chairman Gary Gensler may wait until the last minute to execute a “surprisingly ruthless” rejection of the upcoming applications.
JPMorgan analysts stated in an investment note dated October 17 that they set the likelihood of approval by January 10, supported by the general view, at 90%, as Bloomberg ETF analysts James Seyffart and Eric Balchunas did.
