Bitcoin Price Going To $50k If SEC Greenlights Multiple BTC Spot ETFs

Bitcoin Price Going To $50k If SEC Greenlights Multiple BTC Spot ETFs

The potential approval of multiple Bitcoin spot exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) is currently one of the hottest topics in the cryptocurrency market, with most investors keeping a close eye. However, before diving into the implications of such a monumental decision, let’s unravel the concept of an ETF and its significance in the crypto realm.

What is an ETF?

An ETF is exactly how it sounds; an investment fund traded on stock exchanges, much like stocks. It tracks an asset or a group of assets, allowing investors to diversify their investments without owning the actual assets. In the crypto market, a Bitcoin ETF replicates the price of Bitcoin, offering investors exposure to the BTC price movements without the procedure of actually managing the cryptocurrency.

The Ripple Effect of Futures ETF Approval

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In October 2021, the SEC approved the first Bitcoin futures ETF which was Proshares Bitcoin Strategy ETF (BITO) listed on the New York Stock Exchange. These futures ETFs are based on Bitcoin futures contracts- which are an agreement to buy or sell a specific amount of Bitcoin at a predetermined price at a specified time in the future.

As a result, the crypto market witnessed a significant recovery through October registering a 63% monthly gain, and bolstered the buyers to reach a new all-time high of $68,789.

Spotting the Difference with Bitcoin Spot ETFs

A Bitcoin spot ETF directly reflects the current price of Bitcoin. It involves the actual purchase of Bitcoin, thereby exerting a more direct influence on its supply and demand dynamics. The approval of such ETFs would mark a significant leap forward, as it indicates a higher level of trust and integration of Bitcoin within regulated financial systems. 

What it Means For Bitcoin Price

Many investors anticipate that the SEC’s nod could trigger a bullish rally in the Bitcoin market, as it would represent a significant endorsement of Bitcoin’s legitimacy as a financial asset. This will potentially unleash a new wave of institutional investment which is expected to increase liquidity and stabilize the BTC price. 

Thus, with better confidence and avoiding the technical complexities of buying and storing digital currencies, more retail investors can approach the crypto market.

Will Bitcoin Rally with the Spot ETF Approval

In June 2023, the cryptocurrency market experienced a significant surge, largely influenced by the potential impact of Bitcoin exchange-traded funds (ETFs). This optimism was fueled by several prominent asset management firms submitting their Bitcoin ETF applications. This led to the BTC price jumping from $25,000 to $31,000 in just two weeks, with altcoins also gaining momentum.

In a recent development, Bloomberg ETF analysts James Seyffart and Eric Balchunas pointed out a crucial window starting November 9th to 17th, within which the SEC had the opportunity to approve up to 12 spot Bitcoin ETF filings- including Grayscale’s GBTC trust conversion but emphasized it was only a possibility.

They noted that while the decision deadline for all applications is November 17, the SEC might decide on nine of them any time before January 10, marking a pivotal moment for the crypto market.

Impact on the Crypto Market in General 

The approval of Bitcoin spot ETFs would likely have a cascading effect on the broader crypto market. Other cryptocurrencies could also see increased investment, as the approval would validate the crypto sector in the eyes of skeptical investors. A diversified range of crypto ETFs could emerge, offering exposure to various digital assets and blockchain technologies, further cementing the industry’s legitimacy

What Happens if Not Approved

If the SEC decides against approving these spot ETFs, we may witness an initial wave of disappointment, possibly leading to short-term price dips. However, the resilience of the crypto market has been tested numerous times. Although momentarily disheartening, it is unlikely to derail the long-term journey of this digital asset.

Bitcoin Price Prediction: Historical Data Hints End of Downtrend

The historical price data of Bitcoin price reveals a recurring pattern of significant downturns, each followed by a strong rally surpassing previous highs. Since 2013, Bitcoin has experienced three to four major corrections, each erasing about 80% of its market value before igniting a substantial price surge.

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  • November 2013 Peak to Trough: The Bitcoin price soared to a high of $1,163, only to plummet by 87%, hitting a low of $152.
  • December 2017 High to Low: The coin reached a peak of $19,666 and then underwent an 84% correction, falling to $3,090.
  • June 2019 Decline: From a high of $19,652, the price was corrected by 84%, reaching $3,122.
  • November 2021 to November 2022: The most recent cycle saw Bitcoin reach an all-time high of $69,000 before dropping to a November 2022 low of $15,494, marking a 77% decline.

If history is anything to go by, the prior correction trend has already projected the repetitive pattern of a 70-80% fall, indicating a strong potential for a new uptrend underway, especially with Bitcoin halving expected in a few months.

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