What are the odds that the SEC will approve the Spot Bitcoin ETF?

As the US Securities and Exchange Commission (SEC) position nears to approve Bitcoin ETFs (exchange-traded funds), the cryptocurrency market is buzzing with excitement. This excitement is measurable as investors bet on this outcome on the decentralized prediction platform Polymarket.

In the year On January 15, 2024 The probability stands at 88% probability of approval, which indicates the trading value of “yes” shares in the relevant contract.

88% chance of Spot Bitcoin ETF

The 88 percent probability represents a significant increase from the 50 percent probability predicted a month ago. The growing optimism is not without foundation. A recent report confirmed that the SEC is set to notify 14 spot Bitcoin ETF applicants of their approval status.

This news sent ripples through the crypto market, with Bitcoin prices up more than 55% since early October. Bitcoin's recent rise to $45,000, the first since April 2022, highlights the market's response to these developments. Additionally, the recent price action led to a significant unwinding of over $133 million in short positions, as reported by CoinGlass.

Read More: Analysts Explain Why BTC Price Hits $1 Million After Bitcoin ETF Confirmation

In the year Since its inception in 2020, Polymarket, a major player in the prediction market, has seen more than $526,623 in revenue on this particular ETF forecast. The platform allows investors to bet on various events reflecting market sentiment. The current betting trend suggests strong confidence in the SEC's imminent approval.

The potential approval of the Spot Bitcoin ETF is significant for several reasons. First, it opens up the cryptocurrency market to more investors, attracting billions of new investments. Also, a spot ETF is priced directly from the real-time price of Bitcoin, providing a more direct investment opportunity.

This structure can lead to greater exposure and liquidity in the cryptocurrency market.

“In the Middle Ages, [Bitcoin ETFs] Matty Greenspan, CEO of Quantum Economics, told BEncrypto.

Additionally, the approval of such ETFs marks a major step toward mainstream cryptocurrency adoption in the US. It connects traditional financial markets and the often volatile crypto market.

By trading on regulated platforms like the New York Stock Exchange and Nasdaq, these ETFs offer a safe and regulated way to invest in Bitcoin.

“Imagine the magnitude of that. If there is a hundred billion dollars flowing into Bitcoin, the people at Fidelity think it could be about 11 times the valuation, so you could see Bitcoin go from a $600 billion asset to a $6 trillion asset.” Anthony Scaramucci, CEO SkyBridge Capital, said.

Still, this optimism is not without danger. Some traders hedge their bets by buying “No” shares on the Polymarket contract. In fact, they are bracing for a price crash if the SEC delays or withholds Bitcoin ETF approvals.

“The odds of the ETF approval being a ‘sell-news' event are increasing as Bitcoin market participants sit on high unrealized profits. For example, short-term bitcoin holders are facing a high unrealized profit margin of 30%, which has historically preceded price corrections,” argued CryptoQuant analysts. .

This cautious approach reflects the volatility of the market and the high stakes of regulatory decisions.