- Bitcoin records a 20-month high in the New Year.
- Rumors of an earlier-than-expected ETF approval swirl.
- There is no guarantee that the SEC will grant ETF approval.
The US Securities Exchange Commission (SEC) has long denied spot Bitcoin ETF applications. Yet since the summer of 2023, the surge in ETF application filings has raised hopes that the SEC will crack and finally approve a spot BTC ETF product.
Months of speculation have culminated in a January 10 deadline for the SEC to grant ETF approvals. However, rumors are swirling that approvals could come as early as this week, sending the price of Bitcoin above $45,000 for the first time since April 2022.
ETF Approvals This Week?
The SEC has remained tight-lipped about the status of spot BTC applications. However, some crypto community members are optimistic that the SEC may approve applications this week. YouTuber Crypto Rover tweeted on January 2 that BlackRock expects the SEC to give the nod this week.
Michaël van de Poppe, the founder of MN Trading, attributed the bullish New Year Bitcoin price action to market conjecture around an earlier-than-expected spot ETF approval.
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Andrew Kang, Mechanism Capital’s co-founder, stated that “$45k still feels mispriced,” considering factors such as the upcoming halving and the “all-out land grab” between ETF providers. Kang explained that ETF providers are competing against each other to earn fees and gain a foothold in the “bonanza” of Bitcoin ETFs.
Bitcoin Legitimacy
The emerging bonanza arising from yet-to-be-approved spot Bitcoin ETF products has far-reaching implications for Bitcoin and cryptocurrency markets.
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Mathew McDermott, the head of digital assets at Goldman Sachs, stated that if approved, spot Bitcoin ETFs will hasten industry growth by unlocking institutional capital inflows. McDermott added that the knock-on effects may see BItcoin “de-risk,” lending to stability, bringing about market maturation and growing acceptance among the previously skeptical.
“It does that because you’re actually creating institutional products that can be traded by institutions that don’t need to touch the bare assets. And I think that, to me, that opens up the universe of the pensions, insurers, et cetera,” stated McDermott.
In a rush to grab a slice of the ETF pie, ETF providers have been busy amending their applications to fall in line with the SEC’s preference for cash-only redemptions, including Grayscale, which refiled its S-3 application to specify no in-kind redemptions, and Van Eck, which changed application wording to read authorized participants “will deliver only cash to create Shares and will receive only cash when redeeming Shares.”
Cathie Wood, Ark Invest founder, recently expressed optimism about gaining approval. During a recent interview, Wood acknowledged a degree of ongoing uncertainties in the approval process but commented that differences in regulatory engagement compared with previous attempts made her hopeful.
“We think the probabilities have gone up because the SEC has been highly engaged compared to what was happening before. Before, it was just denying approval, denying approval,” commented Wood.
While expectations of imminent ETF approval swirl, finance expert Rajat Soni mentioned that Bitcoin will continue to thrive even if the SEC denies the ETF application. Soni added that Wall Street needs the ETF, not Bitcoin or Bitcoiners.
Despite approval uncertainty, the price of Bitcoin moved above $45,000 for the first time since April 2022.
Bitcoin Price
Bitcoin opened the New Year priced at $42,280, closing on January 1 at 4.5% higher at $44,200. Tuesday saw a continuation of bullishness at the time of writing, moving as high as $45,900 to record a 20-month high.
Bitcoin is trading around 33% below its all-time high of $69,000, achieved in November 2021, heightening expectations of an imminent return to previous cycle highs.
On the Flipside
- Max Keiser warned that cash-only ETFs give investors no claim to actual Bitcoin.
- Price volatility may see Bitcoin dip below $45,000 as quickly as it got there.
Why This Matters
Bitcoin breaking through $45,000 resistance ahead of the touted January 10 ETF deadline signals traders are increasingly confident of SEC approval. Bitcoin will likely surge past $50,000 in the short term to earn its place as a mainstream investment product if approved.
Read about Van Eck’s appraisal of BTC ETF product performance here:
Bitcoin ETF Hopes May Be “Overestimated”: VanEck Adviser
Find out about Jimmy Song’s assessment of Bitcoin Ordinals here:
Bitcoin Ordinals Rejected as Altcoin Scam by Jimmy Song
