After a day of consolidation, Bitcoin price continues to close above the resistances below the ATH level, while gradual rises are sustained. BTC price gained $2,000 in two hours to bounce back to 4-month highs on October 8th. Another bullish wave is expected if regulators approve Bitcoin ETFs. However, there are experts who do not agree with this.
Bitcoin price surpasses Wednesday’s high
TradingView data showed that bullish momentum reached $56,150 on Bitstamp. In Wednesday’s spike, Bitcoin price surpassed $55,800 and remained a level to be surpassed after last Thursday with consolidation. Analysts expected another sharp rise in Bitcoin price:
I think there’s another BTC pump coming soon. If I have to say, it will be brutal.
Then, forecasts flared in anticipation of a new uptrend. Further focus was placed on ETF approval from the US regulator and its possible implications. cryptocoin.com As we reported, confidence is high that a futures-backed Bitcoin ETF will make progress this month, even though it is not a traditional spot-based product. As with the years-long battle to get such approval, critics continue to argue that an ETF could ultimately do more harm than good to Bitcoin. In particular, futures came under scrutiny this week.
Alex Krüger delivers possible bad news!
“Few understand that if approved, there will be futures underlying this Bitcoin ETF,” macro analyst Alex Krüger said in a thread of tweets. For those who might be in spot and futures trading, Krüger said:
Futures are often in strong contango (i.e. futures > spot), so on a rollover the ETF *sells low to buy high* and suffers a Contango Bleed. Assets with a strong contango bleeding tendency are lower.
He also added that a spot-based ETF would be the only attractive option for large-volume institutional clients, as the futures-based alternative carries excessive risk.
There are mixed opinions about ETF benefits
Meanwhile, Analyst Willy Woo highlighted the general pros and cons of both types of ETFs:
Apart from their initial access to ETFs, I think the best thing is BTC’s potential to address the unit bias issue. Long-term downsides:
- Spot ETFs – increased selling pressure from fees.
- Futures ETFs – more volatility due to the potential for price suppression and the dominance of futures.
Grayscale Bitcoin Trust, which commentators claim their fortunes are already affected by possible ETF approval, continued to see negative share price relative to spot price, surpassing -17% on Thursday. The firm’s CEO, Michael Sonnenshein, reiterated its plans to potentially convert every fund into an ETF in the future.
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