Bitcoin Price Outlook in Case of Unapproved Spot ETF

The recent surge in Bitcoin's performance can be attributed, at least in part, to the optimism surrounding the impending launch of several spot ETF products. While there's a widespread belief that the U.S. Securities and Exchange Commission (SEC) will eventually approve a spot Bitcoin ETF (although the timing remains uncertain), it's important to consider the possibility of continued rejections and the potential impact on the cryptocurrency's price.

• It is anticipated, as per analysts' projections, that there will be a downturn in short-term pricing should the SEC reject a bitcoin spot ETF. 
• Experts, on the other hand, emphasized that the viability of Bitcoin is not contingent on the approval of an ETF.

 Analysts anticipate a negative short-term price reaction in the event of SEC rejections. Laurent Kssis, a crypto trading adviser at CEC Capital, suggested, 

"We could see a move downward with the target potentially falling below $30,000."

 However, Kssis emphasized that any decline would need to be weighed against other positive factors, such as the upcoming halving. He added, 

"A significant drop to $25,000 is highly improbable unless the SEC's decision is unequivocal. I anticipate it will lead to a reevaluation, with optimism persisting in the minds of investors."

Martin Leinweber, a product strategist at MarketVector Indexes, expressed that a rejected spot Bitcoin ETF would be a substantial disappointment for the market. He stated, 

"The spot Bitcoin ETF is widely seen as a symbol of institutional acceptance and integration into mainstream financial systems."

 Leinweber also noted that a rejection could potentially lead to legal challenges for the SEC, especially in light of a previous court ruling against the agency's rejection of Grayscale's attempt to convert its Bitcoin Trust into a spot ETF.

While Bitcoin's existence isn't contingent on an ETF due to its decentralized nature, Leinweber acknowledged that 

"A rejection would undoubtedly cast a bearish shadow on Bitcoin's price in the short term." 

He further emphasized that it would necessitate a period of adjustment and reevaluation, as the market would need to redefine its narrative moving forward.

Bullish Momentum Extends Beyond the Scope of ETFs

According to Leinweber, other cryptocurrencies like Ether (ETH) would likely also be affected by these consequences, particularly since the SEC's attention would then shift to spot Ether ETF applications. Samir Kerbage, CIO of Hashdex, offered a perspective on Bitcoin's long-term outlook, stating, 

"In the event that a spot ETF isn't approved in the near future, we maintain a very positive investment case for Bitcoin in 2024."

 Kerbage highlighted the growing recognition of Bitcoin as a store-of-value asset or a form of digital gold. He also pointed out that the approaching Bitcoin halving could lead to a positive price reaction, drawing from historical patterns of supply reduction.

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