Economist Alex Krüger Warns of Potential Bitcoin Crash After Spot Bitcoin ETF Approval
Economist Alex Krüger is cautioning traders about the possibility of a Bitcoin (BTC) crash following the approval of a spot market exchange-traded fund (ETF). Krüger believes that if the U.S. Securities and Exchange Commission (SEC) approves spot market BTC ETFs, it will result in a sell-the-news event.
According to Krüger, Bitcoin’s price will initially rise after the expected approval date in January, but this rally will be met with profit-taking. He suggests that strong inflows after the ETF launch could push BTC’s price up further. However, weak inflows or rejected ETF bids could lead to a significant drop in the flagship cryptocurrency’s value.
Potential BTC Price Movements
Krüger outlines his base case scenario for Bitcoin ETF approval:
#1 When: Jan 8th-Jan 10th
#2 Immediate reaction: up on approval (rationale: currently 90% priced-in)
#3 Follow-up: drop below pre-approval point into launch ~2 weeks later, cleaning up all late levered monkeys (rationale: market [is] very hot now, with altcoins funding in the 20-60%, and Bitcoin’s March futures annualized basis around 17-20%).
Note there is no official date for the launch, it could be days after approval, or much later, though given how many ETFs are in the race sooner rather than later makes more sense.”
Bitcoin’s Current Price
At the time of writing, Bitcoin is trading at $42,529, experiencing a slight increase over the past day.
Hot Take: Potential Market Impact of Bitcoin ETF Approval
Economist Alex Krüger warns that the approval of a spot market exchange-traded fund (ETF) for Bitcoin could have significant consequences for its price. While the immediate reaction to approval is expected to be positive, with a rise in BTC’s value, Krüger believes that profit-taking will soon follow. He also highlights the importance of strong inflows after the ETF launch to maintain an upward trend, as weak inflows or rejected bids could lead to a crash in Bitcoin’s price. Traders should remain cautious and stay alert during this period of potential volatility.
By
By
By
By
By
By