What Will Happen to Bitcoin Price if Spot ETF Is Not Approved?
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Analysts expect negative short-term price action if a Bitcoin spot ETF is rejected by the SEC.
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However, analysts have pointed out that Bitcoin’s existence does not depend on an ETF.
Markets have largely accepted the idea that the US Securities and Exchange Commission will approve a Bitcoin spot ETF. (The timing is unclear), but it is important to consider the possibility of further rejections and the impact this could have on price.
What can we expect after the knee-jerk reaction?
Laurent Kssis is a crypto trading advisor at CEC Capital.
Kssis said that any decline must be weighed against other bullish factors such as the upcoming halving. “A cluster at $25,000 is highly unlikely unless the SEC is categorical, but I have a feeling it will be a situation where you’ll go back to the drawing board with hope still in the back of your mind
Martin Leinweber is a product analyst at MarketVector Indexes. He said: “If the ETF is not approved, it would be a huge disappointment for the markets.” The spot Bitcoin ETF has often been seen as an indicator of institutional adoption and integration into mainstream financial systems.
Leinweber said a rejection could also lead to legal turmoil for the SEC. The agency suffered a major loss in court in June when it was found “arbitrary and capricious” in rejecting Grayscale’s refusal to convert its Bitcoin Trust (GBTC) into a spot ETF. In October, the SEC was unable to appeal that ruling. This has led to the current expectation that approvals will be forthcoming.
Leinweber points out that although Bitcoin is a decentralized system, its existence does not depend on the ETF. However, “a rejection of an ETF would undoubtedly cast a negative shadow on the short-term price of Bitcoin.”
He said: “I think the lack of an ETF will weigh significantly on the cryptocurrency market.” There would be a time of adjustment and rebalancing as the market needs to decouple and create a new narrative for the future.
Leinweber said that other crypto assets such as Ether would not be immune to these impacts. This is especially true considering that the SEC will next focus on spot Ether applications for ETFs.
Bullish behavior extends beyond the ETF
Hashdex CIO Samir Kerbage said: “In the event that a spot ETF is not approved soon, Bitcoin’s investment case for 2024 remains very strong.” More and more investors are.” We are beginning to see the value of Bitcoins as digital gold or a store of value.”
He concluded that “regardless of when a Bitcoin ETF is approved, the prospects for the greatest and the world’s first cryptocurrency have never been better.”
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