Bitcoin ETFs Approved
In our last monthly update we discussed the possible approval of the first Bitcoin ETF. On January 10th the time had finally come. The US SEC approved several ETFs. Funds from prominent managers such as ARK Invest & 21Shares, Bitwise, Invesco Galaxy, WisdomTree, Valkyrie, BlackRock, VanEck, Fidelity, Hashdex, Franklin Templeton, and Grayscale have been given the green light by the SEC. And can therefore be traded directly on the stock exchange.
These bitcoin ETFs offer investors direct access to bitcoin through a regulated financial product. This is a safer and more accessible way to invest in bitcoin.
A spot bitcoin ETF tracks the actual price of bitcoin, unlike derivatives or futures. This means that with every purchase of ETF shares, the fund manager must buy bitcoins accordingly. This allows investors to participate indirectly in the bitcoin market. and without having to worry about the storage and security of their crypto assets.
The approval of Bitcoin ETFs by the SEC is a significant step forward for the entire crypto sector. It offers institutional and private investors a new regulated way to invest in bitcoin. This could lead to an increase in demand for bitcoin. And potentially have a positive effect on the price of bitcoin. Furthermore, this decision could pave the way for more crypto-related financial products on mainstream markets. And contribute to the further adoption of crypto.
We have seen the bitcoin price rise sharply in the last months of last year. This was mainly fueled by speculation surrounding a possible approval of bitcoin ETFs. Ultimately, the price of bitcoin topped out at around $47,000 at the time of approval on January 10. It turned out to be a short-lived sell-the-news event. Because after approval we mainly saw a declining price development. At the time of writing, the bitcoin price is at $43,000.
What can we expect in the coming period?
We are not in the most exciting period at the moment. We see that the price range, which has been formed since the beginning of December last year, is still intact. It is nice to see that two deviations have now occurred. The first in the run-up to the ETF approval around January 10. And a second one around January 23rd.
When we look back on this, these are also logical moments when market makers do their work. On January 10, the price shoots up out of the price range. Fueled by the positive news of the ETF approval. This is the moment when people often become euphoric. A decline then begins, with the price once again shooting out of the price range. This is where the fear of a sell-the-news event strikes. Fortunately, we saw a strong reclaim of the price range immediately afterwards, which is a strong signal. At this point, the price will mainly move between $40,200 and $44,600. For now we have to wait for the breaking of range low or range high. This will provide more information about the direction of further price development. Until then, sit on your hands.
