Bitcoin has stabilized after a recent red weekly candle close, but altcoins have yet to recover from the losses triggered by the onset of FUD earlier in the week. The crypto community is eagerly awaiting the potential approval of a spot Bitcoin ETF, which could significantly impact the market.
The decision on the spot Bitcoin ETF, a pivotal moment for cryptocurrencies, is expected on January 10. The market has been closely monitoring the developments, including AP agreements, updates to filings, and recent uploads to the SEC system by exchanges.
Expectations are high that the approval of the spot Bitcoin ETF could trigger a market rally. However, there is also a sentiment that a “sell the news” event might occur next week if the approval seems certain. BlackRock’s anticipated $2 billion demand on the first trading day could reflect massive interest from trillion-dollar asset managers.
Unlike futures ETFs, spot Bitcoin ETFs are required to hold actual Bitcoin in reserve, similar to Tesla’s billion-dollar Bitcoin purchase. This could lead to a supply shortage and potentially drive prices up as institutional demand overwhelms the market.
Analysts warn of impending volatility, with Matthew Hyland noting the narrowing of Bollinger Bands as the ETF decision week approaches. Daan Crypto Trades observes a “spot premium” in the Bitcoin market, indicating less appetite for long positions among derivative traders, which could dampen bullish sentiment.