One of the most anticipated weeks in the history of cryptocurrency is upon us, with high chances of finally receiving approval for a Bitcoin Exchange-Traded Fund (ETF) by the U.S. Securities and Exchange Commission (SEC). The past three months have witnessed Bitcoin's value surge by a remarkable 60%, largely fueled by the hopes pinned on this week's decision.
The SEC is expected to announce its verdict on the Ark 21 Shares Bitcoin Trust this week, igniting heightened speculation in the cryptocurrency market. Additionally, to level the competitive playing field, the SEC is also anticipated to approve multiple spot Bitcoin ETF applications concurrently. Among the 13 companies awaiting approval, prominent players such as BlackRock, Invesco, Fidelity, Grayscale, Ark, Bitwise, and VanEck are standing by.
Economist and author Noelle Acheson points out that just a few months ago, most individuals believed this was an improbable scenario, but now, the odds seem significantly more favorable for approval.
JPMorgan analyst Kenneth Worthington emphasizes that the introduction of spot Bitcoin ETFs and the influx of new assets into the crypto ecosystem will hinge on the sustainability of this rally, especially with Bitcoin's impending halving expected next spring. The bullish narrative revolves around the expectation that regulated Bitcoin ETFs will bring fresh institutional demand to Bitcoin at a time when its supply is set to decrease.
Owen Lau of Oppenheimer underscores the significance of fund flows as a crucial market signal. He suggests that if the initial inflow into these ETFs proves weak, it could exert downward pressure on Bitcoin prices.
Bitwise conducted a survey that revealed only 39% of financial advisors expected an ETF launch this year. However, 88% believed that its approval would be a pivotal catalyst for the market.
Both Noelle Acheson and Tyrone Ross, CEO of Onramp Invest, caution that the initial market response might disappoint, but over the medium to long term, as financial advisors become more well-versed in the cryptocurrency asset class, the situation could become more intriguing.
JPMorgan's Worthington notes that the rally initially kicked off with expectations surrounding cryptocurrency spot ETFs, particularly Bitcoin Spot ETFs. He suggests that continued high activity, trading volume, and price levels could provide the necessary momentum to sustain this rally.
