Speculations about the ETF approval’s potential effects on Bitcoin (BTC) have been widespread. Greeks.live, an options platform, provides insights into how the exchange-traded fund could influence the value of the leading cryptocurrency.
Potential Bitcoin ETF approval imminent
The U.S. Securities and Exchange Commission (SEC) is reportedly set to inform asset managers seeking to launch a spot Bitcoin (BTC) ETF about the approval status of their applications as early as next week.
A seasoned trader, renowned for accurately predicting the year’s crypto breakout, now provides insights on Bitcoin’s optimal trajectory post potential approval of spot market BTC exchange-traded fund applications (ETF).
DonAlt, the pseudonymous analyst, says a prolonged consolidation period would be the most favorable scenario for Bitcoin after potential ETF approval. According to The Daily Hodl, he anticipates a “sell-the-news” reaction to the upcoming ETF announcement on Jan. 10. Afterward, the price of BTC is unlikely to drop significantly below $20,000.
However, Greeks.live suggests that the market has already factored in the potential approval of the Bitcoin ETF. As a result, it anticipates that the approval may not bring substantial returns for the asset or cause significant price movement.
The platform bases its assessment on the minimal volatility observed in major-term implied volatilities (IVs) and the current Bitcoin price. Implied volatility, indicating the market’s expectation of an asset’s future movement, plays a crucial role in this analysis.
On Jan. 12, despite the belief in a strong correlation between options IV and the Bitcoin ETF, there was a decrease rather than an increase. This decline in implied volatility, coupled with the overall low volatility, suggests that even with significant impending news, the impact on Bitcoin’s price may not be substantial.
At the time of writing, Bitcoin is trading at $42,509, reflecting a modest 0.7% price increase in the past day. Notably, the cryptocurrency has experienced a remarkable 156% increase this year, partly fueled by expectations surrounding a spot ETF.
Goldman Sachs predicts bullish year
Investment bank Goldman Sachs forecasts substantial expansion in the cryptocurrency market, specifically highlighting the potential growth of Bitcoin and Ether exchange-traded funds (ETFs).
Per CoinGape, Goldman managing director Mathew McDermott cautions against expecting an immediate transformation in the cryptocurrency landscape post-ETF approval. Instead, he envisions a gradual evolution over the next year, dependent on regulatory approval.
With major players like BlackRock and Fidelity awaiting the SEC’s decision on their spot bitcoin ETF applications. The prevailing sentiment is optimistic, with hopes for a positive outcome that could unlock new avenues for institutional investments in Bitcoin.
Looking to 2024, McDermott foresees substantial growth in the crypto market. This optimism stems from the increased integration of blockchain technology in commercial applications and traditional financial institutions’ growing involvement in the crypto space.
A focal point for McDermott is the development of tokenization marketplaces. He predicts these platforms will gain significant traction, particularly among investors, driven by the emergence of secondary liquidity on-chain — a crucial factor enabling market expansion.