Bitcoin ETF Approval: A Positive Catalyst

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As the eagerly anticipated decision on the Bitcoin exchange-traded fund (ETF) approaches, speculation runs rife within the cryptocurrency community. ARK 21Shares is poised for a verdict on Wednesday, sparking heated discussions about the potential repercussions of both approval and denial on Bitcoin’s market dynamics.

Forecasts diverge, encompassing expectations of a surge in price following approval and potential declines in the wake of both approval and denial. Nevertheless, a notable analyst questions the logic behind those “shorting” Bitcoin before the decision.

Bitcoin ETF Approval Sparks Intense Debate

The impending decision from the United States Securities and Exchange Commission (SEC) on ARK 21Shares’ spot Bitcoin ETF application, scheduled for January 10, has ignited a fierce debate among crypto commentators on X (formerly Twitter).

As the SEC deadline looms for other asset managers, Alex Becker, addressing his 922,000 followers on X, argues against the notion that approval of a Bitcoin ETF would trigger a “Sell the news” event. According to him, it’s more about broadening access to the asset for wealthier individuals who may otherwise have hesitated to venture into the crypto space due to its unconventional nature, especially when compared to traditional stock exchanges:

“It allows the biggest money holders in the world to actively invest in a way that is comfortable and easy for them.”

As of the current publication, Bitcoin is priced at $43,639. Amidst the uncertainty surrounding the Bitcoin ETF, various commentators share diverse perspectives.

Commentators Divided on Bitcoin ETF Uncertainty

Dan Webb, the engineering lead at Swan Bitcoin, highlights a potential scenario where even if the ETF approval results in a decline in Bitcoin’s price, the downside may not be as significant as the potential upside in the event of positive news. He questions the risk-reward ratio for those shorting Bitcoin, especially considering the limited potential upside for shorts (5-10% without leverage) even if the ETF is approved and triggers a “sell the news” event.

Mati Greenspan, the Founder and CEO of Quantum Economics, expressed skepticism earlier this month, suggesting that SEC Chair Gary Gensler is unlikely to approve any crypto-related ETF. Greenspan speculates that Gensler may seek to avoid disappointing his allies and could potentially act to delay crypto innovation in favor of traditional financial institutions.