The Potential of U.S. Spot Bitcoin ETFs is Being Undervalued by the Market
According to crypto research firm K33 Research, the market is not fully appreciating the potential of U.S. spot bitcoin ETFs. They believe that prices should have gone up by now, considering it’s a buyer’s market. If a spot bitcoin ETF is approved, it could attract significant inflows and create buying pressure on bitcoin. Conversely, a rejection would maintain the status quo.
K33 Research notes that the market is underestimating this positive news. Grayscale’s recent legal win caused a brief 6% surge in the market before retracing. The agency’s delay of several spot bitcoin ETF proposals has also impacted market valuation. Despite the Nasdaq 100’s 2% climb, the market seems mispriced given the high likelihood of spot ETF approvals this year.
Derivatives Market Sentiment Could Change Suddenly
K33 Research highlights that sentiment in the crypto derivatives market has been consistently negative since mid-August. However, they caution against putting too much weight on the current derivatives market, as it is pessimistic without conviction. Open interest remains stable, and there are no significant flows into bitcoin futures ETFs. The options market’s skew, which measures traders’ bullish or bearish inclinations, is volatile.
Ether Exposure Looks Favorable
K33 Research suggests that September and October favor a larger exposure to ether. They believe that the second-largest cryptocurrency has stronger ETF momentum in the short term. The SEC is expected to give a final verdict on futures-based ether ETFs in mid-October, and K33 Research believes the scales are tipped in favor of approval. With the current ETHBTC trading near its 2.5-year lows, they argue that it is a strong relative buy.
Hot Take: The Market Isn’t Fully Embracing the Potential of Bitcoin ETFs
The market may be missing out on the true potential of U.S. spot bitcoin ETFs. Despite the positive news surrounding approval prospects, prices haven’t reflected the buyer’s market. If approved, these ETFs could lead to substantial buying pressure on bitcoin. While sentiment in the crypto derivatives market has been negative, it could change quickly. Additionally, K33 Research suggests that a larger exposure to ether in September and October could be beneficial. The SEC is expected to approve futures-based ether ETFs, and the current ETHBTC trading level makes it an attractive buy. With these factors in mind, it seems like the market is underestimating the impact of ETF approvals.
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