The Launch of a Spot Bitcoin ETF May Lead to Price Drop, Report Suggests
The approval of a highly anticipated spot Bitcoin exchange-traded fund (ETF) next year could potentially cause a drop in the price of the cryptocurrency, according to a report by blockchain data firm CryptoQuant. The report suggests that investors, who have already made significant gains leading up to the potential launch, might engage in a “sell the news” event. As a result, the price of Bitcoin could plunge to as low as $32,000 per coin from its current price of $42,539.
Increasing Odds of ETF Approval
The U.S. Securities and Exchange Commission is expected to approve a Bitcoin ETF soon, with Bloomberg Intelligence analysts placing the odds at 90% by January 10, 2024. A spot Bitcoin ETF would allow traditional investors to gain exposure to the digital coin without having to directly purchase or store cryptocurrency.
Concerns over Market Manipulation
The SEC has been cautious in approving a Bitcoin ETF due to concerns about market manipulation. However, major players like BlackRock have applied for their own product this year. CryptoQuant also noted in an October report that the approval of a spot Bitcoin ETF could bring substantial fresh capital into the space, potentially increasing the cryptocurrency’s market cap to $900 billion from its current $832 billion.
Hot Take: Potential Price Drop Amidst ETF Approval
The highly anticipated launch of a spot Bitcoin exchange-traded fund (ETF) has the potential to trigger a price drop in the cryptocurrency. Investors who have already seen significant gains may sell their holdings following the news, resulting in a potential plunge in Bitcoin’s price. Despite concerns over market manipulation, it is expected that the U.S. Securities and Exchange Commission will approve a Bitcoin ETF soon. This approval could attract traditional investors and bring a substantial amount of fresh capital into the cryptocurrency market.
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