Bitcoin Surges to $45,000 Amidst Anticipation of SEC’s ETF Approval

Bitcoin has skyrocketed to over $45,000, hitting its highest point since April 2022. The surge is fueled by growing anticipation among investors regarding the U.S. Securities and Exchange Commission’s (SEC) decision on approving spot Bitcoin exchange-traded funds (ETFs). 

Investor enthusiasm is further intensified by reports from Reuters suggesting that the SEC might announce its decision on Bitcoin ETFs as early as Tuesday, January 2. 

The potential approval holds significant implications for the U.S. regulatory landscape, representing a departure from the SEC’s historical inclination towards futures-based ETFs.

The SEC’s anticipated approval of Bitcoin ETFs marks a pivotal moment, signalling a shift in the regulatory stance towards cryptocurrencies. 

Traditionally, the SEC has been cautious about direct cryptocurrency investments, favouring futures-based ETFs. 

A favourable decision could signify broader acceptance of crypto, potentially unlocking new avenues for investment and enhancing Bitcoin’s credibility in traditional financial sectors.

Experts Opinions

Market experts, however, have diverse opinions on the immediate and long-term impacts. Gabor Gurbacs, an adviser at VanEck, offers a nuanced perspective, suggesting that initial market responses might be modest, with around $100 million flowing in post-approval. 

He emphasizes the long-term potential, drawing parallels with the historical trajectory of gold investments and anticipates trillions of dollars flowing into Bitcoin ETFs over the years.

Analysts are divided on the short-term impact, with some predicting a limited rally on the approval day due to diminishing implied volatility in Bitcoin options.

On the other hand, analysts like Scott Melkor foresee a bullish trend, suggesting that Bitcoin is forming a “bull pennant” after consolidating around $40,000. Melkor anticipates Bitcoin reaching as high as $54,000 in the days following potential SEC approval. 

Meanwhile, Gabor Gurbacs predicts an initial market “letdown” but envisions substantial inflows, measuring in trillions of dollars, over the coming years as Bitcoin ETFs gain traction.

At the time of writing, Bitcoin is trading at $43,000, exhibiting a remarkable 5.6% drop in the last 24 hours.