Spot Bitcoin ETF ‘Nailed’ for 2024: K33 Report
The January 10, 2024 spot bitcoin exchange-traded fund (ETF) approval appears set in stone, with new ETF updates only increasing the likelihood of further approval, K33 Research analysts say.
In a Dec. 19 report, K33 head of research Anders Helsz and senior analyst Vettel Lunde said recent ETF updates — filers including BlackRock and ARK Invest have now agreed to a financial innovation setup for their funds — mean approval is “nailed” for January.
Additionally, the report highlighted the strength of BTC's price action last week, with analysts noting that BTC trading volume was significantly higher than in previous months.
“This strong rally in BTC will attract new buyers and encourage profit taking by sellers, indicating that the price will strengthen on higher trading volume.”
Despite the strength in Bitcoin spot volumes, the report noted that open interest on BTC perpetual contracts fell to new annual lows, indicating “no sign of a retail bubble.”
Alternatively, institutional investors on the Chicago Mercantile Exchange (CME) have only increased their appetite for bitcoin-related risk, with CME open interest rising by 3,100 BTC last week.
However, the analysts said that this cannot continue after the approval.
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When spot EFAs are approved, analysts predict a “significant spin” from futures-based EFAs at CME.
“Furthermore, active traders will likely realize profits on their current long positions. Combined, this creates a setup for CME dominance going forward.”
Altcoin season could be good for Bitcoin.
The report highlighted several “pockets of euphoria” in altcoins such as Solana (SOL) Ordinals (ORDI) and Bonk (BONK), which have gained 22%, 114% and 338% respectively in the last 20 days.
While many market analysts often interpret this kind of manic market performance as a sign that the market is nearing a top, the analysts explained that this could be in Bitcoin's favor.
“Altcoin Fiesta takes the brunt of the bubble, so ‘boring old bitcoin' is less exposed to liquidity risks. In this sense, altcoins act as a positive pressure valve for pleasure seekers, allowing healthy leveraging conditions in BTC.
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