Speculation has been widespread about the potential impact of ETF approval on Bitcoin (BTC). Options platform Greeks.live provides insight into how exchange traded funds can affect the value of major cryptocurrencies.
Potential Bitcoin ETF Approval Imminent
It has been reported that the U.S. Securities and Exchange Commission (SEC) plans to notify asset managers wishing to launch a spot Bitcoin (BTC) ETF of the application approval status as early as next week.
The seasoned trader known for accurately predicting this year’s cryptocurrency breakout now offers insight into Bitcoin’s optimal trajectory following the approval of the spot market BTC Exchange Traded Fund (ETF).
Anonymous analyst DonAlt said the most favorable scenario would be an extended consolidation period for Bitcoin following the approval of a potential ETF. According to The Daily Hodl, he is expecting a “news-selling” response to the ETF announcement scheduled for January 10th. Afterwards, the BTC price will not fall significantly below $20,000.
However, Greeks.live suggests that the market has already considered the possible approval of a Bitcoin ETF. As a result, we do not expect approval to result in significant returns or significant price fluctuations for the assets.
The platform is evaluated based on key period implied volatility (IV) and the minimum volatility observed in the current Bitcoin price. Implied volatility, which represents the market’s expectations about the future movement of an asset, plays an important role in this analysis.
January 12 saw a decline rather than an increase, despite the belief that there is a strong correlation between Option IV and the Bitcoin ETF. This decrease in implied volatility, combined with lower volatility overall, suggests that even if significant news is imminent, it may not have much of an impact on the Bitcoin price.
As of this writing, Bitcoin is trading at $42,509, reflecting a small 0.7% price increase from the previous day. In particular, cryptocurrencies have seen a remarkable increase of 156% this year, thanks in part to expectations surrounding spot ETFs.
Goldman Sachs predicts strong performance this year
Investment bank Goldman Sachs predicts a significant expansion of the cryptocurrency market, particularly highlighting the potential growth of Bitcoin and Ethereum exchange-traded funds (ETFs).
According to CoinGape, Goldman Managing Director Mathew McDermott warned not to expect immediate changes in the cryptocurrency landscape following the ETF’s approval. Instead, he plans gradual progress over the next year, subject to regulatory approvals.
Major players such as BlackRock and Fidelity are awaiting the SEC’s decision on their spot Bitcoin ETF applications. Optimistic sentiments dominate, with hopes for a positive outcome that could open new avenues for institutional investment in Bitcoin.
Looking ahead to 2024, McDermott expects the cryptocurrency market to grow significantly. This optimism stems from the increasing integration of blockchain technology into commercial applications and the growing participation of traditional financial institutions in the cryptocurrency space.
McDermott’s focus is developing the tokenization market. He predicts that these platforms will attract significant interest, especially among investors, due to the emergence of on-chain secondary liquidity, a critical factor in enabling market expansion.