Bitcoin (BTC) experienced a rebound on Thursday, reaching $44,500, as market participants shrugged off a recent flash crash and maintained a positive outlook on the imminent approval of a U.S. spot BTC exchange-traded fund (ETF).
Despite a Matrixport report on Wednesday warning of a potential rejection contributing to a brief 10% dip in bitcoin prices, most experts anticipate approval from the U.S. Securities and Exchange Commission (SEC), possibly as early as Friday.
Bloomberg ETF analyst Eric Balchunas, speaking during U.S. afternoon hours, revealed that the SEC was providing final comments on the applications, expecting issuers to update their filings accordingly. TechCrunch reporter Jacquelyn Melinek, citing sources close to the matter, supported this sentiment, asserting that the SEC is poised to approve multiple applications.
@JSeyff @EricBalchunas any news from you? 🙂
— Alessandro Ottaviani (@AlexOttaBTC) January 4, 2024
At present, BTC is up by 4% over the last 24 hours, trading at $44,500, effectively recovering from yesterday’s decline below the $41,000 level.
The anticipation of spot-based bitcoin ETFs, holding the underlying asset directly, has been a positive force in the crypto market since BlackRock’s filing in June to list one in the U.S. This move triggered a flurry of applications, with these vehicles perceived as superior to existing futures-based offerings, prompting bullish expectations of significant inflows into the leading cryptocurrency.
In an intriguing twist, a survey by Bitwise and VettaFi released on Thursday found that only 39% of financial advisors anticipate spot BTC approval this year. However, 88% of these advisors view the spot ETF as a major catalyst, expressing interest in purchasing bitcoin after approval. Bitwise, among the asset managers awaiting word from the SEC on spot bitcoin ETF applications, is closely monitoring these developments.
Matrixport’s research head, Markus Thielen, who authored the report predicting a potential rejection or delayed approval, clarified in a CoinDesk podcast interview on Thursday that he ultimately foresees the SEC greenlighting spot-based ETFs for bitcoin. However, Thielen suggests bitcoin prices may dip in the coming weeks as technical indicators signal a faltering uptrend.
Looking ahead, once spot BTC ETFs receive approval, Thielen anticipates a shift in investor focus toward Ethereum’s ether (ETH), the second-largest cryptocurrency. Spot-based ether ETF decisions are expected around May, and Thielen predicts substantial outperformance of ETH over BTC in the wake of the approval.
“We would expect then we’re going to see some large outperformance of ETH over BTC,” Thielen predicted.