US SEC Expected to Provide Guidance on Bitcoin ETF Next Week
The decision by the US Securities and Exchange Commission (SEC) regarding Bitcoin ETF applications has garnered significant attention. Speculation had mounted that the world’s largest asset managers’ ETF proposals would receive approval on Friday. However, reports now indicate that one issuer has disclosed to FOX journalist Charles Gasparino that the SEC’s guidance on the BTC spot ETF is expected “hopefully next week,” possibly coinciding with the January 10 deadline.
Bitcoin ETF Approval Update
According to Gasparino, as the SEC reviews multiple Bitcoin ETF applications, there may be slightly different timetables for decision-making based on when each application was filed. This means that the approval or denial of these index funds may not coincide.
The SEC remains tight-lipped about the specifics of their Bitcoin ETF decision-making process, leaving industry experts and investors eagerly awaiting the forthcoming guidance.
Guidance on SEC decision on BTC “spot” ETF is that it’s coming “hopefully next week,” according to one issuer. Keep in mind may be slightly different timetables for decisions on applications based on when they were filed, or the SEC will do all at once. I don’t know
Bitcoin and Ethereum Futures Surge
Crypto trading firm QCP Capital highlights that Bitcoin and Ethereum (ETH) funding and futures have been notably elevated, particularly in Q4 2023 and intensifying into 2024. Perpetual swap funding rates on exchanges like Deribit surpassed 100% (annualized), while the spot-futures basis experienced significant expansion, with the 1-month spread reaching as high as 30%. However, a deleveraging event occurred on January 3rd following reports suggesting that the SEC might not approve the Bitcoin ETF due to the lack of a comprehensive Surveillance Sharing Agreement (SSA). This triggered a steep drop in BTC’s price, falling from $45,500 to $40,800 within an hour.
Despite the deleveraging event, BTC has shown resilience and climbed back to the $44,000 level. The market remains cautious of a potential “sell the news” reaction. Still, the ongoing price strength provides more confidence in the medium-term bullish view, particularly with BTC halving projected for March or April this year.
QCP Capital notes that cryptocurrency prices continue to decouple from traditional finance (TradFi) markets, primarily due to the bullish ETF narrative. While rates markets are pricing in six cuts for 2024, contradicting the Federal Reserve’s (Fed) projection of three cuts, this “aggressive pricing” can swiftly unwind if new data points indicate a resurgence in job market strength or higher inflation, posing a significant macro risk to monitor.
ETH Emerges As Promising Opportunity Ahead
If the BTC spot ETF is approved, QCP Capital identifies ETH as an interesting laggard play. Additionally, ETHBTC is currently positioned at a strong support level of 0.051. QCP Capital suggests that one of the most apparent trading opportunities is selling the spot-futures basis spread, which remains highly elevated at around 12-20% annually.
Hot Take: Bitcoin ETF Approval Decision Expected Next Week
The highly anticipated decision by the US SEC regarding Bitcoin ETF applications is expected to be announced next week. Investors and cryptocurrency enthusiasts have been eagerly awaiting this guidance. Reports suggest that there may be different timetables for decision-making based on when each application was filed. The recent surge in Bitcoin’s price has been fueled by anticipation of a positive outcome, as investors hope for increased accessibility and regulatory validation. While the market remains cautious of a potential “sell the news” reaction, ongoing price strength provides confidence in the medium-term bullish view. QCP Capital highlights ETH as an interesting opportunity if the BTC spot ETF is approved.
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