Big News in the Crypto space yesterday was the SEC Approval of Bitcoin ETFs. I posed the question just 2 days ago To ETF, or not to ETF and suggested that even if the approval was granted we might see a Sell The News reaction from the market. Well, did we...?
The initial news resulted in a short term spike as Bitcoin traded up from about $46K to just under $49K, but then it came right back down even faster. Basically, as I am writing this the Bitcoin price is about the same point it was before the news even broke. This is a very clear signal to me that, yes, the approval news was already “Priced In” because there were plenty of Insiders who knew the approval was a done deal. It was a fairly poorly kept secret.
What happens from here though? I will admit that once the Bitcoin ETFs are actually up and running we might see some serious Capital Inflows from Institutional Investors, but how long is that going to take...and what happens in the meantime? I personally think it is very likely that we will see a bit of a Pullback here as the Hype slowly deflates the Overbought conditions before the first actual ETF is listed and starts trading. That might not take long at all but the Capital Inflows on that first ETF will definitely be worth watching when it happens.
The other interesting thing that’s happened is that Ethereum has had a bit of a pump. Could Mr Market now be anticipating (and front-running) a potential Ethereum ETF Approval? Maybe the focus will shift slightly in the short term as speculators start looking at other prominent alt-coins and their ETF potential. Keep an eye out because if this Bull Market gets some steam it could get very interesting, very quickly...
