Spot Bitcoin ETF Approval Could Accelerate Institutional Investment
In an interview on Bloomberg TV, John Palmer, the President of Cboe Digital, expressed the possibility that the approval of a spot exchange-traded fund (ETF) for Bitcoin by U.S. regulators could be a game-changer for the digital asset space. According to Palmer, institutional investors would benefit significantly from the introduction of a spot Bitcoin ETF, given current restrictions.
The Market Response to a Potential Spot Bitcoin ETF Approval
Bitcoin has been on an upward trajectory recently following the potential approval of a spot Bitcoin ETF by the U.S. SEC. Bitcoin exceeded $45,000 on January 2, marking its highest value since April 2022. It is currently trading at around $45,065, a 1.66% decrease over the past 24 hours due to market anticipation for the SEC’s decision on the ARK 21Shares Bitcoin ETF, the deadline for which is set for January 10.
Long-Term Growth for Bitcoin Derivative Products
John Palmer foresees the dawn of a new era for Bitcoin derivative products once the spot Bitcoin ETF comes into play. He suggested that institutional players may begin to integrate these derivatives to hedge against bitcoin risks and align with the introduction of Cboe Digital’s margined Bitcoin and Ether futures on January 11, expanding institutional participants’ access to trading futures.
Anticipating a ‘Sell-the-News’ Event Ahead of Spot Bitcoin ETF Verdict by SEC
Research by K33 Research’s Vetle Lunde and Anders Helseth indicates that the market is showing signs of a ‘sell-the-news’ event due to the anticipation of the SEC’s decision on spot Bitcoin ETFs. Significant premiums in derivatives and increasing open interest in BTC suggest a potential sell-off by short-term traders to realize profits.
Positive Long-Term Impact of Spot Bitcoin ETF Foreseen
K33 Research suggests that despite a possible short-term market downturn in response to the introduction of spot Bitcoin ETFs, they anticipate a favorable long-term impact, especially when considering the scheduled Bitcoin halving event for April, which could be beneficial for the market in the long run.
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