Bitcoin ETF Approval: A Potential Sell-The-News Event?

• Bitcoin's Potential Response to Spot ETF Approvals in 2023
• Bitcoin's Momentum Amidst ETF Anticipation
• More Room to Run?
• Is Bitcoin's Rise Just the Beginning?

Bitcoin's Potential Response to Spot ETF Approvals in 2023

Amidst a positive year for Bitcoin$42,260 -0.64%, with the cryptocurrency holding steady at approximately $41,400, the industry eagerly anticipates the potential approval of spot exchange-traded funds (ETFs). While some believe approval could push Bitcoin's value higher, others speculate it could instigate a correction- a common occurrence in the trading world where assets often experience a drop in value following major anticipated news. James Edwards, a cryptocurrency analyst at Finder, suggests this could be a case of ‘sell-the-news'.

Bitcoin's Momentum Amidst ETF Anticipation

Bitcoin's performance has seen various peaks over the past year, with optimism surrounding spot ETFs believed to be a contributing factor. Given Bitcoin's 5% increase in the last 24 hours, and continuous growth throughout 2023, it's possible the anticipation of approval may be partially factored into its current price.

More Room to Run?

On the other side of the argument, Samneet Chepal, a quant researcher, suggests that strong trade market fundamentals indicate there could be further growth potential. With futures trading at a 10% premium to the spot price, reaching highs for 2023, the potential returns are significantly exceeding benchmarks including the 4.2% yield on 10-year Treasuries.

Is Bitcoin's Rise Just the Beginning?

Chepal suggests this could merely be the start, with numbers possibly exceeding previous cycle highs if Bitcoin maintains its momentum ahead of the expected ETF approvals in early 2023. However, as a notoriously volatile asset, Bitcoin is a 'wild card,' making it challenging to anticipate whether the approval of Bitcoin ETFs could result in a 'sell-the-news' scenario.

Edited by Jonathan Stoker