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Lai Lai Lai..Bitcoin ETF is now half fill or half empty moment arrives
- Thread starter k1976
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The Crypto Market Rally Looks Overdone, JPMorgan Says
Digital assets have seen strong gains in the last month due to excitement about the potential approval of bitcoin spot ETFs, but this bullish sentiment may be misplaced, the report said.
By Will Canny
Excitement about the potential approval of spot bitcoin exchange-traded-funds (ETF) has fueled a strong rally in digital assets over the past month, but the move higher seems overdone, JPMorgan (JPM) said in a research report last week.
Bullish sentiment has been buoyed by two main arguments, the bank said.
A spot bitcoin ETF approval would help crypto markets to attract fresh/new capital as the newly-approved ETFs see inflows,” and the “approval would cement a win for the crypto industry and a setback for the Securities and Exchange Commission (SEC) thus making it more likely that going forward the SEC approach towards the crypto industry will soften,” analysts led by Nikolaos Panigirtzoglou wrote.
The bank says it is skeptical of both arguments. Instead of new capital entering the crypto sector, it is more likely that existing capital will move from current bitcoin products such as the Grayscale Bitcoin Trust (GBTC), bitcoin futures ETFs and listed mining companies, into the newly approved spot ETFS.
JPMorgan notes that such ETFs already exist in Canada and Europe and have gained “little interest from investors since their inception.”
While the Ripple and Grayscale court rulings represent legal defeats for the SEC, “it is far from clear that the regulatory tightening of the crypto industry will lessen significantly going forward given how unregulated this industry is,” the report said.
JPMorgan notes that such ETFs already exist in Canada and Europe and have gained “little interest from investors since their inception.”
While the Ripple and Grayscale court rulings represent legal defeats for the SEC, “it is far from clear that the regulatory tightening of the crypto industry will lessen significantly going forward given how unregulated this industry is,” the report said.
“U.S. crypto industry regulations are still pending and we do not believe U.S. lawmakers would shift their stance because of the above two legal cases especially with the memories from the FTX fraud still fresh,” the analysts wrote.
The bitcoin halving, likely in April or May next year, is also cited as another bullish tailwind for crypto markets, the bank said, but this argument is “unconvincing” as the effect of the halving is unpredictable and is already priced in.
CoinDesk’s parent company, Digital Currency Group, also owns Grayscale.
The bitcoin halving, likely in April or May next year, is also cited as another bullish tailwind for crypto markets, the bank said, but this argument is “unconvincing” as the effect of the halving is unpredictable and is already priced in.
CoinDesk’s parent company, Digital Currency Group, also owns Grayscale.
Bitcoin ETF: Will it Be a Game-Changer or a “Buy-the-Rumor, Sell-the-News” Scenario?
Published By
Elena R
NOVEMBER 13, 2023
In a recent tweet, Crypto Rover explores the intriguing dynamics surrounding the potential approval of the Bitcoin Spot ETF, questioning whether it will be a buy-or-sell-the-news event.
As anticipation builds and the Securities and Exchange Commission (SEC) decision looms, the crypto community is abuzz with speculation on how this groundbreaking development could impact the market.
Buy-the-Rumor, Sell-the-news
Crypto Rover delves into the intricacies of the “buy-the-rumor, sell-the-news” phenomenon, explaining the two distinct groups of individuals poised to react when the ETF decision is announced.The first group, anticipators, bought Bitcoin in expectation of ETF approval, intending to sell upon the news. This section breaks down the psychological and market dynamics behind this common trading strategy.
Institutional Dynamics: A Game-Changer?
Contrary to the anticipators, institutions are positioning themselves for the long term, actively buying into the instrument as it makes its way to the market.Crypto Rover suggests that the buying pressure from institutions could significantly outweigh that of the anticipators, presenting a different narrative than the conventional “buy-the-rumor, sell-the-news” scenario.
With the potential introduction of the Bitcoin ETF, Crypto Rover estimates capital influx ranging between $200 billion and $300 billion.
This section explores the far-reaching financial implications, emphasizing that all ETFs are expected to be backed 1:1 by actual Bitcoin. This surge in capital could pave the way for Bitcoin to attain new all-time highs.
Meanwhile, the crypto community eagerly awaits the SEC’s decision, and the potential for a paradigm shift in Bitcoin’s trajectory post-ETF approval adds a layer of excitement and uncertainty to the evolving narrative.
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