Just when everyone was coming to terms with the fact that Bitcoin wasn’t ready for further price appreciation and was destined to end the year under 30K, the flagship crypto proved once again that volatility is a powerful force in the crypto market and one never knows what could happen next.
At the end of October, Bitcoin managed to break out of the $25K-$29K range, which has served as its comfort zone for most of the second half of the year and continued to rally largely unbothered, with only minor setbacks interrupting its otherwise impeccable performance, as evidenced by the BTC price chart.
Over the past few weeks, the Bitcoin price has appreciated rapidly, surpassing $38,000 on November 15th – a value it hadn’t reached since May 2022. At the time of writing, Bitcoin was trading at $37,243 after a slight price correction pushed the asset back under $38K. Although there are numerous factors influencing crypto prices, most experts agree that the current is largely fueled by the enthusiasm and anticipation regarding the potential approval of a spot BTC ETF by the Securities and Exchange Commission (SEC).
So, now that the SEC has delayed its decision, is Bitcoin going to plummet or is the bearish phase going to extend into the future? These are some of the questions running on many traders’ minds at the moment and unfortunately, there is no clear answer in sight.
Spot Bitcoin ETF applications are making waves in the crypto market
Crypto investments have always been a rather sensitive topic due to the high risks they involve. Financial experts continue to be extremely reserved in this respect, advising traders and investors to be cautious and consider their risk tolerance before they add crypto to their portfolios. As with all other digital currencies, Bitcoin remains a highly volatile asset, despite its long track record in the market. However, this hasn’t diminished Bitcoin’s appeal as an investment vehicle.
At the moment, investors can purchase Bitcoin futures ETFs to gain exposure to the asset, but that means using contracts to buy or sell Bitcoin at a predetermined price without directly owning the asset. By comparison, a spot Bitcoin ETF would provide investors with direct access to the asset and its current market price, streamlining the whole process. This means that the approval of a spot Bitcoin ETF would lead to major transformations in the market, creating more opportunities for both institutional and individual investors.
Unfortunately, the SEC has repeatedly rejected spot Bitcoin ETF applications due to concerns regarding fraud and market manipulation. But this didn’t make financial firms give up. In June, the world’s biggest asset manager, BlackRock Inc., submitted an application for a spot Bitcoin ETF, and that quickly escalated into more companies filing similar applications.
There are currently 12 spot-bitcoin ETF applications waiting for approval from the SEC, from Grayscale, 21Shares & Ark, BlackRock, Bitwise, VanEck, Wisdomtree, Invesco & Galaxy, Fidelity, Valkyrie, Global X, Hashdex and Franklin. The fact that all these major firms expressed their interest and determination in launching spot Bitcoin ETFs and the hope that this time things might be different served as a catalyst for the current Bitcoin rally, pushing the asset out of its stagnation phase.
The deadline for Hashdex and Grayscale’s applications was set for 17th November but the SEC decided to take more time to review the request and pushed the decision date further. Contrary to expectations, this didn’t have much impact on Bitcoin’s trajectory, as revealed in the price chart. On the contrary, these delays are generally seen as proof of the SEC taking these filings more seriously than before.
What’s more, the majority of analysts remain hopeful that all spot Bitcoin applications will be approved in bulk in January 2024. Most agree that if the SEC gives the green light on one spot Bitcoin ETF, the rest of the applications will also get the seal of approval.
Bitcoin pushes forward despite uncertainties
Whether the spot Bitcoin ETF applications will finally receive a positive ruling from the SEC or not remains to be seen. As usual, the crypto market is riddled with uncertainties, concerns, potential and plenty of contradictory predictions. Amidst all this chaos and ambiguities, Bitcoin continues to cruise, eyeing a new resistance level at $38K.
It’s easy to attribute Bitcoin’s rally to all the buzz created around spot Bitcoin ETFs, but in reality, these applications might not be the only factors behind the surge. One should not forget that the Bitcoin halving is just around the corner and many investment decisions may be influenced by Bitcoin’s behavior around this time.
Crypto history teaches us that the Bitcoin price tends to appreciate in the period prior to and following each halving. Bitcoin has gone through three halvings so far, in November 2012, July 2016 and May 2020, and each time the pattern repeated itself. The next halving is estimated to occur in April 2024, which means that Bitcoin has already entered the pre-halving appreciation phase.
The fact that the flagship crypto maintains an upward trajectory and doesn’t seem to be affected by other developments inside and outside the crypto market also supports the bullish theory of an incoming price increase. If we were to trust historical patterns, we can expect heightened volatility in the months leading up to the halving event, which can prompt many investors to buy in order to secure a profit or sell, fearing a drop in the assets’ value.
The current price increase is giving investors hope that Bitcoin might hit a new record high at some point in the near future. The prospect of spot Bitcoin ETFs being approved by the SEC and the fast-approaching halving also instill a sense of optimism in the market, so we can conclude that the outlook for Bitcoin is quite bullish at the moment.