Bitcoin Stands Firm Above $46K as ETF Speculation Mounts: A First Mover Review

• Crypto Markets Show Positive Movement Amid ETF Speculation
• Possible Delay in ETF Approvals
• BlackRock and VanEck Update Filings
• Grayscale Bitcoin Trust's Discount Narrows
• Chart of the Day

Crypto Markets Show Positive Movement Amid ETF Speculation

Bitcoin$42,260 -0.64% remains above $46,500 on Tuesday morning, briefly reaching $47,000, as speculation over the approval of Exchange-Traded Funds (ETF) increases. The cryptocurrency demonstrated a 5% gain in the past 24 hours.

Multiple market analysts predict that the U.S. Securities and Exchange Commission (SEC) will authorize a spot bitcoin ETF soon. However, not everyone shares this viewpoint.

Possible Delay in ETF Approvals

Youwei Yang, Chief Economist at BIT Mining, suggests that the approval of a spot bitcoin ETF is unlikely in the near future. Instead, Yang foresees a potential delay of at least three months by the SEC. He cites possible concerns related to manipulative behaviors observed in the crypto market and suspected criminal or terrorist activities involving cryptocurrencies as reasons for potential delay.

Other analysts speculate that the potential approval has already been accounted for in the market. Matteo Bottacini, a trader at Crypto Finance, asserts that many market participants have anticipated this event, which may limit further price increases.

BlackRock and VanEck Update Filings

BlackRock and VanEck, two of 13 companies seeking to introduce bitcoin ETFs in the U.S., submitted updated documents on Tuesday. The paperwork reflects that they have received feedback from the SEC within the past 24 hours. The updates include language to protect shareholders in the event of insolvency and prevent conflicts of interest among the ETF's authorized participants.

Grayscale Bitcoin Trust's Discount Narrows

The Grayscale Bitcoin Trust (GBTC), the world's largest bitcoin fund, saw its discount reduce to the lowest since April 2021, based on expectations of a spot bitcoin ETF conversion. The discount fell to 5.6% on Monday, a level not seen since June 2021. Although the fund has been trading at a discount since February 2021 - reaching a high of nearly 50% in December 2022, the anticipation of ETF approval and a rising bitcoin sentiment have gradually reduced the gap.

GBTC shares were valued at $39 on Monday, with each share constituting $41.86 worth of bitcoin as of Tuesday. The Trust lacks a built-in market mechanism to keep the GBTC share price close to the underlying value of bitcoin, enabling discounts and premiums that traders can use as a trading strategy.

Chart of the Day

The chart illustrates the mentions of bitcoin ETF on social media and bitcoin's price since November. A focus on ETF optimism sets the stage for a potential price drop following the SEC's approval. It is speculated that the U.S. SEC will approve one or more spot ETFs by January 10.

Edited by Jonathan Stoker