📉 Bitcoin loses 2% ahead of today's SEC Bitcoin ETF decision 🔍

2:58 pm 10 January 2024

Bitcoin is down 2% today and currently hovers around the $45,000 level. Investor activity in the last day of waiting for SEC Bitcoin ETF decision is quite low. Market speculation indicates that the SEC's decision may take place at the beginning or at the end of the US business session (around 1 PM GMT or 8 PM GMT). Undoubtedly, these are periods during which it is worthwhile to remain vigilant, although the SEC final announcement could come at any time today. BlackRock cut costs (TER) of the iShares Bitcoin ETF to 0.25% which sector commentators interpreted as another signal of possible SEC green light today, but the future remains unknown.

In anticipation of the SEC

  • BTC skyrocketed yesterday to the vicinity of $48,000 after a 'fake' positive announcement from the SEC, which turned out to be the result of a hack. Since then, sentiment has slowly weakened and investors remain cautious
  • The small amount of volume and transactions today may suggest that investors are waiting for the decision, and the market is showing the first signs of 'exhaustion' after the euphoric rally since October
  • A spike in Bitcoin's volatility after the SEC announcement seems very likely, even more so given the low volume and lower market depth
  • Volatility could also be seen in stocks related to the crypto sector, including Coinbase (COIN.US), Microstrategy (MSTR.US) and Riot (RIOT.US), among others

Sizable profits = pressure to sell

  • The amount of BTC addresses in profit is about 95% according to the latest NUPL on-chain (Glassnode) reading. This coincides with phases indicating market overheating and increasing selling pressure from short term-holders. On the other hand, however, the reaction to the SEC's decision is unpredictable
  • VanEck's sources suggested, for example, that BlackRock has about $2 billion in investor reserves that will feed into the iShares spot ETF in the first week of trading, which could significantly affect the price of BTC
  • All of this leads to the conclusion that what will happen moments after the (eventual) approval of the ETF applications (capital inflows and BTC buying) is very important

Is Gensler still skeptical?

  • The head of the SEC,Gary Gensler has strongly indicated that the Agency has not approved any spot Bitcoin ETF applications, putting a question mark over whether the final decision (which we will learn today) will be positive

  • On the other hand, yesterday's announcement by the SEC chairman can be interpreted as information that straightens out the fraudsters' message that the US regulator has accepted the applications

  • The day before yesterday, Gensler issued a statement highlighting the well-known risks of investing in Bitcoin, including the risk of lawsuits and political actions that can affect its price

  • Gensler's statement on X was received mixed, although anonymous sources among lawyers working with the SEC from FoxBusiness indicated that the statement is likely a prelude to ETF approval

  • On the other hand, Gensler's stance may signal the Agency's aversion to Bitcoin and determination to 'protect investors' by preventing them from gaining an allocation in BTC through, among other things, pension plans or other tools that would likely be triggered after a positive SEC decision.

  • Bitcoin's price could react sharply, regardless of the regulators' announcement. According to Glassnode's latest report, Bitcoin's volatility is currently close to +1 deviation from average, which has historically coincided with temporary volatility spikes.

Bitcoin chart (M30 interval)


Source: xStation5

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

Share:
Back

Join over 1 600 000 XTB Group Clients from around the world.