Bitcoin's Resilience: Surging Beyond $44K Amidst Growing Confidence in Spot BTC ETF Approval

On Thursday, reports surfaced indicating that the U.S. Securities and Exchange Commission (SEC) is in the final stages of evaluating various Bitcoin exchange-traded fund (ETF) applications based on spot prices, hinting at potential approval soon. This information sparked a recovery in Bitcoin (BTC) prices, essentially recovering all the losses incurred during the flash crash on Wednesday.

Despite a Matrixport report on Wednesday expressing caution about a potential rejection, which led to a brief 10% decline in BTC, the overall sentiment among market observers remains positive, with expectations of SEC approval as early as Friday. Bloomberg ETF analyst Eric Balchunas suggested that the SEC is giving final comments on the applications, and issuers are anticipated to update their filings accordingly.

SEC is giving final comments as we speak, then issuers will submit final 19b-4s and S-1s soon after. So I mean this is def as close to "done" as we've been but no official approval as far as I know.

— Eric Balchunas (@EricBalchunas) January 4, 2024

Adding to the anticipation, TechCrunch reporter Jacquelyn Melinek, citing sources close to the matter, asserted that the SEC would soon approve multiple applications. Consequently, BTC experienced a 4% increase over the past 24 hours, reaching $44,500 at the reporting time and successfully recovering from the dip below $41,000.

heard from sources extremely close to the matter that the bitcoin spot ETF is going to be approved by the SEC for *multiple* firms' applications

— Jacquelyn Melinek (@jacqmelinek) January 4, 2024

The focus on spot-based Bitcoin ETFs, which directly hold the underlying asset, has played a significant role in shaping the cryptocurrency market, especially since BlackRock, a major player on Wall Street, initiated the process for a U.S. listing in June. This move triggered a wave of similar applications, as these spot-based ETFs are deemed superior to existing futures-based alternatives, with optimistic expectations of significant inflows into the leading cryptocurrency.

A noteworthy survey by Bitwise and VettaFi on Thursday revealed that only 39% of financial advisors anticipated the approval of a spot BTC ETF this year. However, the same survey disclosed that 88% of these advisors considered the approval of spot ETFs a major catalyst and expressed interest in purchasing Bitcoin post-approval. Bitwise, among the asset managers awaiting SEC decisions on spot Bitcoin ETF applications, is well-positioned to capitalize on such sentiments.

Ether's Impending Rise: Unveiling the Next Chapter in Cryptocurrency Evolution

Matrixport's research head, Markus Thielen, who previously suggested a potential rejection or delayed approval in a report on Wednesday, clarified in podcast interview that he ultimately expects the SEC to approve spot-based ETFs. Nevertheless, Thielen acknowledged that technical indicators hint at a potential downtrend for Bitcoin in the coming weeks, even after the anticipated approval.

Furthermore, once spot BTC ETFs receive regulatory approval, Thielen envisions a shift in investor focus towards Ethereum's Ether (ETH), the second-largest cryptocurrency. He anticipates decisions on spot-based Ether ETF applications around May, foreseeing significant outperformance of ETH over BTC following approval.

In summary, the cryptocurrency market is buzzing with anticipation as reports indicate that the SEC is nearing approval for multiple spot-based Bitcoin ETFs. This development has the potential to reshape investor preferences and influence the trajectory of major cryptocurrencies in the weeks to come.

Read More: Wall Street Banks Welcomed to Participate in BlackRock's Bitcoin Exchange-Traded Fund (ETF)