SEC Approves 11 Bitcoin ETFs, but Market Drops
The United States Securities and Exchange Commission (SEC) has granted regulatory approval for 11 spot Bitcoin exchange-traded funds (ETFs), creating excitement in the crypto community. However, despite expectations of a price surge, the Bitcoin market has actually experienced an 8% drop since the ETFs started trading.
Bitcoin ETFs May Unfold Impact Over Time
Cantor Fitzgerald Asset Management CEO Howard Lutnick compared the launch of these Bitcoin ETFs to the first Gold ETF and noted that the rush to buy the asset did not happen immediately. Historical data from the launch of the Gold ETF shows that significant price appreciation took place over several years. For example, when GLD was introduced in 2004, gold’s price stood at $700, but it reached an all-time high of $2,145 by 2023.
Experts suggest that the true impact of these Bitcoin ETFs will also unfold gradually over time.
Potential Inflows and Catalysts
CoinShares estimates that the US has around $14.4 trillion in addressable assets. If even just 10% of these assets invest in a spot Bitcoin ETF with an average allocation of 1%, it could result in approximately $14.4 billion inflows within the first year. These significant inflows have the potential to drive up the Bitcoin price.
However, Cantor CEO Howard Lutnick believes that the halving event, expected in April, remains the primary catalyst for Bitcoin’s growth.
Dual Catalysts: Halving and ETFs
Analysis of past halvings reveals a pattern of substantial rallies leading up to the event, followed by a brief correction and consolidation period before a major bull run and peak. The peak typically occurs about 18 months after each halving.
The upcoming halving in April 2024 is expected to be a significant catalyst for Bitcoin’s price. Additionally, the introduction of Bitcoin ETFs will play a crucial role in positively impacting the cryptocurrency’s price and bringing new inflows and interest to the crypto market.
Hot Take: Bitcoin ETFs and Halving Event to Drive Price Growth
The approval of 11 spot Bitcoin ETFs by the SEC has generated excitement in the crypto community. However, despite initial expectations, the Bitcoin market has experienced a price drop since the ETFs started trading. Similar to the launch of the first Gold ETF, it may take time for these Bitcoin ETFs to have their full impact on the market. Experts suggest that significant inflows from these ETFs could potentially propel the Bitcoin price to new highs. Nevertheless, many believe that the upcoming halving event in April 2024 will remain the primary catalyst for Bitcoin’s growth. Overall, both Bitcoin ETFs and the halving event are expected to drive price growth in the cryptocurrency market.
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