While the crypto community eagerly awaits the decision of the US Securities and Exchange Commission (SEC) regarding the approval of the spot Bitcoin exchange-traded fund (ETF), the stage is set for significant developments in the cryptocurrency market. Industry giants like BlackRock and JP Morgan are making strategic moves and regulatory developments are shaping the landscape. Meanwhile, speculation is intense in the market as the SEC faces a critical January 10 deadline for the ARK Invest 21 Shares Bitcoin ETF application. Let’s examine the key issues affecting the crypto space…
Bitcoin ETF approval a political necessity
Analysts, including TD Cowen, believe it is a “political necessity” for the SEC to approve the spot Bitcoin ETF by January 10. The regulator aims to solidify its role as a crypto regulator ahead of discussions on potential broader crypto legislation in Congress. The crypto industry, where more than a dozen firms including BlackRock and Fidelity are seeking approval, predicts that an influx of institutional investment will push Bitcoin’s price to around $45,000.
In other news, Chicago Board Options Exchange (CBOE) Digital president John Palmer expresses optimism about the potential approval of a spot Bitcoin ETF. It highlights the transformative impact this could have on institutional and individual interest in Bitcoin derivatives. The SEC’s decision on the implementation of the ARK Invest 21 Share Bitcoin ETF, expected on January 10, is seen as an important moment that could open avenues for institutional investors and reshape the cryptocurrency market.
How are market dynamics affected?
Amidst the anticipation of spot Bitcoin ETF approval, there is a debate within the crypto community as to whether this could trigger a news sell-off event. K33 Research predicts that a decision with potential market-moving effects will be made between January 8 and January 10. Analyst Vetle Lunde gives a 75% probability to the sell-the-news scenario, stating that market froth, rising futures premiums and increased interest in Bitcoin derivatives are factors contributing to the uncertainty.
BlackRock took action
Reports indicate that BlackRock and JP Morgan are preparing their staff for the upcoming Bitcoin ETF approval from the SEC. BlackRock has signaled significant progress in the corporate space by selecting JP Morgan as the lead authorized participant. The crypto community is observing the irony of traditional financial players entering the market despite previous skepticism from the likes of JP Morgan CEO Jamie Dimon.
Anticipation of spot Bitcoin ETF approval has increased market sentiment, with Polymarket indicating an 88% probability as of January 15, 2024. This marks a significant increase over previous predictions, and the platform’s prediction market sees a significant amount of bets being placed on the outcome. The potential approval is considered an important step towards mainstream cryptocurrency adoption in the US, attracting institutional investment and bridging the gap between traditional financial markets and the crypto space.
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Bitcoin ETF Approval is Awaited: Here are the Statements of 6 Industry Giants!