Crypto ETF Catalysts

Martin Walker
Sep 6, 2023 at 09:42 am

The crypto market is currently grappling with the possibility of a spot Bitcoin (BTC) exchange-traded fund (ETF) approval, and analysts at K33, formerly known as Arcane Research, are suggesting that this development has the potential to be a game-changer, even though it's flying under the radar for many. In their comprehensive market analysis released on the 5th of September, K33's senior analyst, Vetle Lunde, and the vice president, Anders Helseth, emphasized that the odds of a spot Bitcoin ETF approval have seen a significant uptick in the past three months. Despite this promising outlook, the cryptocurrency community has yet to fully appreciate the implications, which has led to a disconnect between sentiment and market prices across the board.

The analysts elaborated on this phenomenon, noting that while Bitcoin has somewhat retraced its gains after Grayscale's legal victory against the Securities and Exchange Commission, the potential approval of an ETF could trigger an immense influx of capital into the Bitcoin ecosystem, amplifying buying pressure. They also highlighted the intriguing aspect that a potential rejection of a spot ETF would likely have negligible consequences, with Bitcoin maintaining its regular course.

Following Grayscale's triumph, Bitcoin gave back the profits it had previously gained. Cited from K33 ResearchFollowing Grayscale's triumph, Bitcoin gave back the profits it had previously gained. Cited from K33 Research  

Lunde and Helseth went further, suggesting that the market's current perspective on ETFs is fundamentally askew. They boldly asserted, "I strongly believe the market is misjudging the situation. This unequivocally leans in favor of buyers, and it would be imprudent not to adopt an assertive approach in accumulating BTC at its existing price points."

To buttress their optimistic outlook, the analysts drew attention to the recent 2% uptick in the tech-heavy Nasdaq-100 index, often regarded as an indicator of the broader market's risk appetite.

It appears that Ether (ETH) is positioned for stronger performance compared to Bitcoin (BTC)

Furthermore, Lunde and Helseth exuded confidence regarding the future price trajectory of Ether (ETH), reasoning that ETH is well-positioned to outperform Bitcoin in the forthcoming two months. Their optimism is founded on the belief that ETH will capitalize on strong momentum ahead of the introduction of a futures-based ETF. They likened this scenario to Bitcoin's meteoric rise of approximately 60% in the weeks leading up to the launch of the inaugural Bitcoin futures-based ETF on October 19, 2021.

The decision on a futures-based Ether ETF is slated for mid-October, with reports suggesting a favorable outcome from the SEC. This impending development is poised to further fuel market dynamics, adding an extra layer of excitement to the already charged crypto landscape.

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