Bitcoin made a strong recovery on Thursday, surging above $44,500 as investors shrugged off the recent flash crash. The optimism surrounding the potential of a U.S. Spot Bitcoin ETF approval seemed to be a driving force behind the rebound. In fact, some rumours circulating on social media suggest that the approval will take place today, 5th January. Analysts have, however, cautioned against getting over-excited, saying that approval is more likely to come next week.
Bloomberg ETF analyst Eric Balchunas confirms these expectations, stating that the SEC is in the process of providing final comments on the applications. Prospective issuers are expected to update their filings accordingly. TechCrunch reporter Jacquelyn Melinek, citing sources “extremely close to the matter,” added that the SEC is likely to approve multiple applications soon. This news contributed to the positive sentiment in the market.
Bitcoin, trading at $44,500 at the time of writing, demonstrated a 4% increase over the past 24 hours, erasing nearly all losses from the previous day’s dip below $41,000. The anticipation of spot-based Bitcoin ETFs has been a driving force in the crypto market since BlackRock filed paperwork in June to list one in the U.S. Other applicants followed suit, and these ETFs are perceived as superior to already listed futures-based offerings.
Despite the overall optimism, a survey released by Bitwise and VettaFi on Thursday, as reported by Coindesk, revealed that only 39% of financial advisors expected a spot Bitcoin ETF approval this year. However, a more significant 88% of these advisors considered the spot ETF approval as a major catalyst, expressing interest in buying Bitcoin after approval. Bitwise is among the asset managers with spot Bitcoin ETF applications awaiting the SEC’s decision.
Matrixport research head Markus Thielen, who previously warned of a potential rejection or delayed approval, clarified in a CoinDesk podcast interview that he expects the SEC to eventually approve spot-based ETFs. However, he suggested that Bitcoin’s price might experience fluctuations in the coming weeks. Thielen also highlighted the potential for attention to shift to Ethereum (ETH) once spot Bitcoin ETFs receive approval, with decisions on spot-based Ether ETFs expected around May.
Amid the speculation surrounding spot Bitcoin ETF approval, Kevin O’Leary, Chairman of O’Leary Ventures, emphasised that institutional interest in crypto and Bitcoin would remain high irrespective of the SEC’s decision. O’Leary stated on social media platform X on Wednesday, “Even a no decision will not change the long-term potential.”
In an interview on Tradertv Live on 29 December, O’Leary expressed doubt about the SEC approving a spot Bitcoin ETF, citing SEC Chairman Gary Gensler’s potential reluctance. However, he underlined that a negative decision would not deter institutional investor demand for crypto. O’Leary believes that significant developments are already driving institutional interest upward in the crypto market.
Highlighting the role of regulatory approval in institutional investment, O’Leary noted, “The big holdback on Bitcoin and Ethereum, the granddaddies of crypto, has been the fact that institutions…are waiting for the regulator to approve it.” He revealed that institutions and major organisations are prepared to invest in Bitcoin once regulatory approval is secured.
O’Leary previously linked spot Bitcoin ETF approval to the existence of an exchange fully compliant with the SEC. In his view, Coinbase, the Nasdaq-listed crypto exchange, lacks compliance due to its ongoing legal conflict with the securities regulator. Despite these regulatory challenges, O’Leary remains confident in the long-term potential of crypto, underscoring its liquidity and role as a store of wealth.
As the crypto world awaits the SEC’s decision on spot-based Bitcoin ETFs, O’Leary’s insights shed light on the resilience of institutional interest in crypto, reinforcing the notion that the industry is poised for significant growth regardless of the outcome.
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