The U.S. SEC’s Bitcoin ETF ruling is just around the corner. How will it affect the price of Bitcoin?

The crypto world holds its breath, waiting for a big moment for Bitcoin.

Written by Reed Macdonald

Compiled by: Luffy, Foresight News

Bitcoin has risen more than 150% in 2023, a momentum that has captured the hearts of Wall Street, causing Wall Street firms to rush to launch the first-ever Bitcoin spot ETF (exchange-traded fund).

All eyes are now on the U.S. Securities and Exchange Commission’s (SEC) upcoming decision on January 10 to approve or deny a spot Bitcoin ETF.

Judging from historical experience, this ruling will have a significant impact on the price of Bitcoin.

Potential for price increase

Proponents of Bitcoin ETFs believe SEC approval will open the door to a flood of institutional and retail investment, pushing Bitcoin’s price to new heights.

History provides a glimpse into how expectations surrounding ETFs affect Bitcoin’s price.

In 2017, the price of Bitcoin soared above $1,400, partly in anticipation of the first Bitcoin ETF. That’s up from the previous year’s low of $600.

At the time, investors believed that the launch of the Bitcoin ETF would make it easier for institutional funds to enter the market, triggering a buying frenzy. However, the SEC ultimately rejected the proposal, causing Bitcoin prices to plummet.

Within days, Bitcoin price was back below $1,000.

Eventually, however, the arrival of CME Bitcoin futures attracted new attention in 2017, when the market price surged to over $20,000.

Bitcoin prices continue to rise from CME Group Bitcoin futures announcement to listing

Fast forward to 2021, and Bitcoin is once again rising to new all-time highs, reaching over $60,000.

This time the rally has been driven in part by the successful launch of Bitcoin futures ETFs in Canada and Europe. The ETFs allow investors to gain exposure to Bitcoin without directly holding the cryptocurrency, while expectations for a similar product in the United States have fueled bullish sentiment.

Finally, after fake news broke that the ETF was approved in early 2023, the price of Bitcoin increased by thousands of dollars in minutes, a move that suggested that an upside move could follow the Bitcoin ETF approval.

False news of ETF approval causes Bitcoin price to surge

Likelihood of price decline

On the other hand, there is a view that the approval of a Bitcoin ETF could lead to a price correction.

Some market experts worry that ETFs could become targets of short sellers, leading to increased volatility, or that ETFs could become “sell news events.”

Second, the approval of a Bitcoin ETF may bring greater regulatory scrutiny to the entire cryptocurrency market. This increased regulation could lead to increased taxes, reporting requirements and potential restrictions on the use of Bitcoin, which could dampen investor enthusiasm.

Additionally, some believe that the market may have already priced in the news of a possible approval of a Bitcoin ETF, and any decision to deny approval could lead to market disappointment and sell-off, similar to what happened in 2017 when the Winklevoss Bitcoin ETF was rejected.

Bitcoin sold off after ETF rejection in 2017

The crypto community eagerly awaits the SEC’s final decision, but it’s important to remember that this is just one of many factors affecting Bitcoin’s price.

Market sentiment, macroeconomic conditions, and geopolitical events will also play a role in influencing token prices.

in conclusion

All in all, Bitcoin’s price is at a crossroads as investors await the SEC’s ruling on the Bitcoin spot ETF.

While history shows that ETFs are expected to have a significant impact on Bitcoin’s price, it’s also important to consider broader market dynamics. Whether the price of Bitcoin rises or falls following the SEC ruling will depend on a variety of factors, including how the market interprets and reacts to the decision.

While the crypto world holds its breath, the future of Bitcoin hangs in the balance, but there is no denying that this is a pivotal moment for Bitcoin.