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The price of Bitcoin (BTC) has been steadily gaining momentum over the past 11 months amidst banking uncertainty and optimism over spot Bitcoin exchange-traded funds (ETFs). On December 3, Bitcoin cleared the $40,000 mark, reaching its highest level in 19 months.
Logically Expected Sell-off Event with Spot Bitcoin ETF Approval
Crypto analysts posit that, logically, the approval of a spot Bitcoin ETF should trigger a sell-off event. James Edwards, a cryptocurrency analyst at Finder, believes this makes it a "sell-the-news type event," as per Cointelegraph.
However, Edwards concedes that cryptocurrency is a "wild card," meaning that even when a correction seems logical, it may not necessarily occur in the volatile crypto world.
Gradual Institutional Buying and Limited Impact on Day One
Trading View reported that Edwards expresses skepticism that the approval of spot Bitcoin ETFs will lead to widespread institutional buying on day one. He explains that fund managers are unlikely to immediately "ape in" when it goes live. Instead, he suggests that groundbreaking inflows may take months, if not years, to materialize.
Anticipation Surrounds Spot Bitcoin ETF Launch
Ryan McMillin, the chief investment officer at Merkle Tree, describes the spot Bitcoin ETFs as the most hotly anticipated launch ever. He believes that any sell-off in the market will be quickly absorbed, reinforcing the strong interest in these ETFs among investors.
CK Zheng, co-founder of cryptocurrency investment firm ZX Squared Capital, predicts that any price pullback resulting from spot Bitcoin ETF approval will be shallow. This indicates that price corrections are unlikely to impact Bitcoin's overall upward trajectory significantly.
Crypto Analysts View a Correction as Uncertain
Despite acknowledging the potential for a correction, industry analysts, including Edwards, are not convinced that a material correction is a guaranteed outcome. They point to the unpredictable nature of cryptocurrency, where logic does not always align with market movements.
Analysts do not foresee Bitcoin losing steam in December. Edwards cites early signs of institutional investors speculating on the approval of ETFs, with increased inflows to existing Bitcoin futures ETFs. This implies that prices will likely remain steady as investors await confirmation from either charts or an ETF approval.
Joe Carlasare, a crypto lawyer, sees "little chance" of a significant correction occurring before the approval of Bitcoin ETFs. Carlasare shares this sentiment in an X post on December 4, further underscoring the overall confidence in Bitcoin's stability.
As Bitcoin continues its upward trajectory, market sentiment remains positive. The anticipation surrounding spot Bitcoin ETFs, coupled with the gradual inflows from institutional investors, suggests that prices will likely stay buoyant throughout the month of December.
Photo: Kanchanara on Unsplash
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