The price of Bitcoin hit the $30,000 mark earlier this week after Cointelegraph falsely claimed on X that the US securities regulator had rubber-stamped BlackRock’s spot Bitcoin exchange-traded fund (ETF) application. Some analysts see the frenzied price action on the fake ETF news as a prelude to how the market would react when such approval is actually granted.
Market reaction to fake spot Bitcoin ETF news was a ‘dress rehearsal’, says K33 Research
“Violent price action on the fake ETF news serves as a timely reminder of what will likely happen upon a decisive verdict on the spot ETF applications,” analysts at K33 Research wrote in their recent report.
Per the report, Bitcoin on Monday climbed by 7% to $30,000 from less than $28,000 in a span of just eight minutes after false news about BlackRock’s ETF getting the SEC’s nod surfaced on social media platform X. K33 Research analysts also point out that Bitcoin advanced 14% in a week after BlackRock applied for a spot ETF in mid-June.
Source: TradingView
K33 Research analysts expect the approval, when it occurs, to “overshadow both these market reactions.” On the other hand, a rejection could “send the market tumbling,” they say.
Alex Krüger, co-founder of investment research company Asgards Markets, took to X on Monday and said the market reaction signaled that the approval, although widely anticipated, was not entirely reflected in the BTC price reaction.
One thing is for sure. Whoever thinks the ETF is already priced in has just been proven wrong. Expect a +20% day move when approved.
— Alex Krüger (@krugermacro) October 16, 2023
“Whoever thinks the ETF is already priced in has just been proven wrong,” Krüger said in a tweet. “Expect a +20% day move when approved.”
Bitcoin sprint or “a measly pump”?
However, Joe Consorti and Nik Bhatia, authors of The Bitcoin Layer newsletter, disagree. They believe Bitcoin’s Monday rally was “a measly pump.”
“What we experienced was a totally run-of-the-mill intraday price increase for bitcoin, the likes of which we may see on any given Tuesday with a risk-on tone. This indicates that much of the fanfare and price gains of spot ETF approval is baked into bitcoin’s price already,” they argue.
Meanwhile, digital asset brokerage firm Enigma Securities said Monday’s developments are a testament to market participants’ fixation with the spot Bitcoin ETF. Joe Edwards, head of research at Enigma, noted, however, that SEC’s approval of spot Bitcoin ETFs could result in a “sell the news” scenario, where Bitcoin prices might initially rise before retracing.
It’s worth noting that the US Securities and Exchange Commission (SEC) has delayed approving multiple spot Bitcoin ETFs, including from BlackRock, Invesco, and VanEck, among others. However, the launch of Ether futures ETFs, coupled with favorable court rulings for Grayscale and Ripple, has analysts pricing in favor of spot Bitcoin products getting approved sooner rather than later.
CryptoQuant says spot ETF approval will add $1 trillion to global crypto m-cap
On-chain analytics firm CryptoQuant recently published a report, saying the global crypto market — currently valued at $1.1 trillion — could grow by another $1 trillion if the SEC were to give its blessing to a US-listed spot Bitcoin ETF. A potential approval will result in inflows of $450-900 billion into the Bitcoin market alone, CryptoQuant said.
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