Bitcoin ETF verdict is just around the corner, how will the market Fluctuation?

By Reed Macdonald

Compiler: Luffy, Foresight News

Bitcoin is up more than 150% in 2023, a momentum that has captured the hearts and minds of Wall Street, leading Wall Street companies to rush to launch the first-ever BitcoinSpot ETF (exchange-traded fund).

All eyes are now on the upcoming decision of the US SEC (SEC) on January 10 to approve or reject SpotBitcoin ETFs.

Historically, this ruling will have a significant impact on the price of Bitcoin.

Potential for price increases

PROPONENTS OF BITCOIN ETFs BELIEVE THAT THE SEC’S APPROVAL WILL OPEN THE DOOR TO A LARGE NUMBER OF INSTITUTIONAL AND RETAIL INVESTMENTS, PUSHING THE PRICE OF BITCOIN TO NEW HEIGHTS.

History gives us a glimpse into how the expectations surrounding ETFs affect the price of Bitcoin.

In 2017, Bitcoin prices soared above $1,400, in part in anticipation of the first Bitcoin ETF. This is a rise 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 U.S. SEC ULTIMATELY REJECTED THE PROPOSAL, CAUSING Bitcoin PRICES TO DROP SIGNIFICANTLY.

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

Eventually, however, the arrival of CME Bitcoin futures drew new attention in 2017, when the market price soared above $20,000.

From CME Group’s Bitcoin futures announcement to listing, Bitcoin prices continued to rise

Fast forward to 2021, and Bitcoin rose again to an all-time high of over $60,000.

This rally was driven in part by the successful launch of Bitcoin futures ETFs in Canada and Europe. These ETFs allow investors to gain exposure to Bitcoin without directly owning Crypto Assets, while the market’s antimid anticipation of a similar product launch in the U.S. drives bullish sentiment.

Finally, the price of Bitcoin rose by thousands of dollars in a matter of minutes following the fake news that the ETF was approved earlier in 2023, a move that suggests that there could be an upside after the approval of the Bitcoin ETF.

Fake news of ETF approval has caused Bitcoin prices to soar

The likelihood of a price drop

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

Some market experts worry that ETFs could be targeted by short sellers, leading to increased Fluctuation, or that ETFs could become “selling news events.”

Second, the approval of the Bitcoin ETF could bring stricter regulatory scrutiny to the entire Crypto Assets market. This heightened regulation could lead to increased taxes, reporting requirements, and potential restrictions on Bitcoin use, which could dampen investor enthusiasm.

In addition, some believe that the market may have digested the news of the possible approval of the Bitcoin ETF and that any decision to reject the approval could lead to market disappointment and sell-off, similar to what happened when the Winklevoss Bitcoin ETF was rejected in 2017.

Bitcoin sold off after the ETF was rejected in 2017

The crypto community eagerly awaits the SEC’s final decision, but it must be remembered that this is only one of the many factors that affect the price of Bitcoin.

Market sentiment, macroeconomic conditions, and geopolitical events will also play a role in influencing the Token price.

Conclusion

In conclusion, the price of Bitcoin is at a crossroads, given that investors are waiting for the SEC’s ruling on BitcoinSpot ETFs.

While history suggests that ETF expectations can 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 after the SEC ruling will depend on a variety of factors, including how the market interprets the decision and how it reacts.

While the crypto world holds its breath, the future of Bitcoin hangs in the balance, but it is undeniable that this is a pivotal moment for Bitcoin.