🚨Spot Bitcoin ETF Approval Has 75% Probability of Sell-the-News Event, K33 Research 📉💡

As the first spot Bitcoin ETF awaits approval, K33 Research raises a caution flag, stating a 75% probability of a sell-the-news scenario. Despite Bitcoin's recent surge above $450,000, the crypto community is in a heated debate about the potential aftermath of the ETF approval.

1. Selling Pressure Post-Approval: A Looming Concern?

K33 Research's Senior Analyst Vetle Lunde predicts a decision on Bitcoin spot ETFs between January 8 and January 10. Regardless of the timing, there's anticipation of a sell-the-news event. 📰💬 Lunde notes that traders, exposed ahead of the verdict, may trigger a self-fulfilling prophecy with profit-taking as a primary motive.

2. Probabilities According to K33 Research:

75% probability of a sell-the-news scenario.20% chance of approval.5% possibility of ETF denial.

Even with positive signals from recent meetings and updated S-1 prospectuses with the Securities and Exchange Commission, the sell-the-news sentiment persists.

🔍 Market Froth and Excessive Speculation: A Warning Sign

K33 Research points out indications of excessive froth in the market, citing a surge in futures premiums on the Chicago Mercantile Exchange, reaching annualized levels of 50%. Institutional participants, expecting approval, have increased their long exposure. Open interest has grown over 50,000 BTC in the past three months, fueled by the anticipation of spot Bitcoin ETF approvals.

💡 K33 Research Insights: "Maintaining CME exposure involves a 1-2% rolling cost each month, unsustainable in the long term."

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