ETF Deadline Week: A Crucial Time for First Mover Americas

• Anticipation Builds as U.S. SEC Deadline for Bitcoin ETF Applications Arrives
• Bitcoin ETF Approval Could Influence Price Movement
• Bloomberg Analysts Bet on Bitcoin ETF Approval
• ARK Invest Sells Further $20.6 Million Worth of Coinbase Shares
• Chart of the Day: Implied Volatility Curve Changes

Anticipation Builds as U.S. SEC Deadline for Bitcoin ETF Applications Arrives

As anticipation builds around the U.S Securities and Exchange Commission's (SEC) imminent response to spot bitcoin exchange-traded fund (ETF) applications, crypto enthusiasts are watching closely. Ark 21 Shares, among others, is expecting a decision on its application by January 10th. Bitcoin$42,260 -0.64%, in the meantime, is consolidating after reaching a 21-month high near $46,000.

Bitcoin ETF Approval Could Influence Price Movement

Following a dip to $43,400 over the weekend, Bitcoin recovered around 2% to reach $45,000 on Monday. This price activity has been largely driven by the anticipation surrounding the SEC's decision. LMAX Digital has suggested that if the SEC does not greenlight spot ETFs this week, Bitcoin could see a substantial price decline. Despite this, the firm expects any drops to be well supported above the $30,000 mark in 2024. Conversely, an SEC approval could potentially trigger an immediate rally, with Bitcoin seeing a surge of anywhere from 10% to 15%.

Bloomberg Analysts Bet on Bitcoin ETF Approval

According to two influential Bloomberg analysts, the probability of the U.S approving a spot Bitcoin ETF now exceeds 90%. On the contrary, Polymarket crypto market participants have cut their odds to 85%. Bloomberg ETF analyst Eric Balchunas, discussing the possibility of the SEC rejecting proposals, stated, "I probably go with 5% at this point. But you gotta leave a little window open for these things." He had previously predicted the odds at 90% in November.

ARK Invest Sells Further $20.6 Million Worth of Coinbase Shares

Famed investment firm ARK Invest, led by Cathie Wood, sold an additional $20.6 million worth of Coinbase (COIN) shares on Friday across three of its ETFs. ARK Invest aims for no single stock to exceed 10% of an ETF's value. Following a price more than doubling in the last three months of 2023, ARK has been consistently selling COIN shares. Its Innovation ETF (ARKK) holds over $850 million worth of Coinbase stock. This recent offload brings its weighting down to 10.04%, implying that sell-offs from ARKK might be nearing a halt unless there's another surge in Coinbase's share price.

Chart of the Day: Implied Volatility Curve Changes

The chart illustrates the changes in the implied volatility curve derived from Bitcoin options that are set to expire on February 23rd. Implied volatility denotes market expectations for price fluctuations over a given period. With the curve gradually shifting higher in recent weeks, it indicates traders are preparing for heightened price volatility ahead of potential U.S. SEC approval of one or more spot ETFs by January 10th.

Edited by Jonathan Stoker