December 5th’s SEC decision to postpone the Franklin Bitcoin ETF application, originally expected for a January 1st, 2024 deadline, has cast doubt on the possibility of seeing approval for the first wave of Bitcoin spot ETFs in 2023. Despite this setback, industry sentiment remains unwavering, with many asserting that the approval is only a matter of time.
Bloomberg analyst James Seyffart suggests a potential window for spot BTC ETF approvals between January 5 and 10, 2024. Scott Johnsson, commenting on the Franklin delay, speculates that the early postponement may have been strategic to conclude the comment period before January 10, facilitating simultaneous approvals.
Hester Peirce, a well-regarded SEC commissioner, expressed openness to spot Bitcoin exchange-traded products, stating, “There is no reason for us to stand in the way of a spot Bitcoin exchange-traded product.” She acknowledged external factors nudging the SEC and emphasized watching the developments unfold.
In our assessment, the prevailing market sentiment aligns with the anticipation of imminent BTC ETFs. Regarding the potential impact on the market, I don’t foresee the Bitcoin spot ETF as a “sell the news” event. Premature information leaks aside, the SEC’s handling of the approval process should prevent front-running, maintaining the integrity of the organization.
Recent incidents, such as the Cointelegraph Twitter incident, demonstrated that the initial reaction to news tends to be positive – to not say euphoric. Once the short-term trading fervor subsides, sustained demand may emerge from new market entrants who were sideline due to regulations, market buyers with strong liquidity -pension funds, hedge funds, etc …-.
The Bitcoin ETF approval will transcend crypto circles, becoming a focal point in traditional finance. It opens avenues for funds, proprietary firms, and family offices with access to the New York Stock Exchange, offering a perceived secure entry into digital assets.
Expectations are that ETFs will quickly garner interest and demand, potentially attracting substantial institutional capital. This increased demand coincides with an impending supply reduction due to the Bitcoin halving in late April 2024, creating a unique juncture in Bitcoin’s history during a critical phase in the four-year cycle.
As for an Ethereum Spot ETF, industry giants like Blackrock and Fidelity have filed applications. While consensus suggests Ethereum’s approval may lag behind Bitcoin’s, the path appears clear. There’s a possibility of a rotation from BTC to ETH post-Bitcoin spot ETF approval, prompting market participants to reassess their portfolios and move up the risk curve.
Monitoring ETH/BTC and BTC dominance charts is crucial to staying informed. Any move above 0.06 on ETH/BTC could trigger significant market dynamics, with expectations of altcoins and other risk-on digital assets outperforming and catching up in the aftermath of substantial moves in ETH/BTC.
Furthermore, we must remind you of a few points:
1/Elizabeth Warren, American Senator, is pushing hard on updating the banking laws to enlarge the scope to stablecoins such as Tether which she is leveraging as an argument by saying that the stablecoins and BTC were and are still used by terrorists organizations to fund their activities similarly to how North Korea and Iran rely on cryptocurrencies to finance their nuclear programs.
Elizabeth Warren was described by Zachary Warmbrodt at politico.com as building an anti-crypto army since FTX implosion and being the most active lawmaker in USA against cryptocurrencies “as her focus for potential crypto legislation, even as she raises red flags about a host of issues in the space, from consumer protections to environmental impact.”
Knowing that she has close ties with main Banking leaders and the SEC’s chairman , Gary Gensler, we have the conviction that her interest in tackling crypto adoption is secretly motivated by a desire to leave the way open for Central Bank Digital Currencies -CBDCs-.
2/ As mentioned by legendary twitter john_j_brown here, the recent crypto rally was not accompanied by a USDT premium this implies one simple thing: there was no massive flow from outside of the crypto ecosystem which would have pushed the prices, the price rally was mainly fueled by sidelined stablecoins, traders, algos, funds who were sitting on stablecoins… This contradicts the statements propagated by most twitter degens that large new players are already entering the market in expectation of the ETF, the absence of USDT premium disproves this thesis hence is such rally and euphoria justified?
3/ Needless to post economy charts and numbers, those are all scattered on twitter and the main financial outlets, given the excruciating costs of living around the globe, the rampant lay-offs combined with the diplomatic tensions surrounding energy commodities, Oil and its settlement in Rubles, Dollars or Renminbi, we highly doubt that the no-coiners, the non crypto adepts will bring the much anticipated liquidity to drive crypto prices another 10x in the coming months…
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