In a remarkable turn of events, the value of Bitcoin soared above $41,000, marking a significant milestone shortly after reaching $40,000. This surge in value reflects a growing optimism surrounding the potential endorsement of a direct Bitcoin Exchange-Traded Fund (ETF). So is it too late to buy now or a good time to enter the flourishing market?
The momentum of Bitcoin’s value continued into Monday, with its price surpassing $41,700, a notable increase from its $40,000 mark achieved on Sunday. Current figures from Gate.io show Bitcoin’s price slightly above $41,800, marking a 5.6% increase for the day and an impressive 11% rise over the week. This growth is even more striking compared to last year’s value of just under $17,000, illustrating a dramatic 144% increase over the past year.
Bull run is loading
This surge in Bitcoin’s value has propelled its price to heights not witnessed since April 2022 and has significantly contributed to the overall cryptocurrency market capitalization, which now stands at $1.61 trillion, a 3.6% increase in the last 24 hours.
Data from market analysis platforms highlights the impact of Bitcoin’s price surge, revealing that short positions in Bitcoin derivatives worth over $166 million have been liquidated in the last 24 hours.
The weekend’s price dynamics seem to be influenced by the renewed anticipation for the approval of a direct Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC). In recent weeks, the SEC has engaged with applicants such as Grayscale and BlackRock, discussing modifications to their ETF applications. This has led analysts to focus on specific dates in January when the SEC might approve multiple applications at once.
Bitcoin ETFs are lined up for approval
Analysts from Bloomberg Intelligence have estimated a 90% likelihood of the SEC approving a Bitcoin ETF in January, sparking optimism among various key figures, including Coinbase CEO Brian Armstrong and analysts at JP Morgan.
However, the SEC’s decision remains uncertain, as it has historically rejected all previous direct Bitcoin ETF applications.
Analysts predict that Bitcoin’s value might undergo a correction following the approval of direct Bitcoin ETFs. However, the unpredictable nature of the cryptocurrency market leaves room for different outcomes. The last 11 months have seen Bitcoin’s value steadily increase, with notable spikes in March, June, and October, largely driven by the anticipation surrounding Bitcoin ETF approvals.
BTC price prediction
Cryptocurrency analyst James Edwards suggests that the approval of a Bitcoin ETF could lead to a market sell-off. Edwards points out that while his price prediction of bitcoin might seem logical, the immediate large-scale buying by fund managers is unlikely. He anticipates that significant inflows into these ETFs might take months or even years.
Despite the potential for a correction, many experts, including Edwards, recognize that predicting the cryptocurrency market’s behavior is challenging. Ryan McMillin, chief investment officer at Merkle Tree, acknowledges the growing risk of a market correction but also notes the high anticipation surrounding the Bitcoin ETF launch.
CK Zheng, co-founder of ZX Squared Capital, also anticipates any market pullback to be minimal, citing strong underlying fundamentals for Bitcoin, including the upcoming Bitcoin halving, continuous global central bank monetary expansion, and ongoing geopolitical uncertainties.
End of the year outlook
Market experts do not anticipate a downturn for Bitcoin in December. Edwards notes early signs of institutional investors speculating on the ETFs’ approval, as seen in the recent inflows into existing Bitcoin futures ETFs. He expects the market to at least maintain its current levels while awaiting further confirmation from ETF approvals.
Crypto lawyer Joe Carlasare also sees little likelihood of a significant Bitcoin correction prior to ETF approval, questioning why major sellers would emerge so close to the anticipated approval.
Henrik Anderrson, Chief Investment Officer at Apollo Capital, believes that a collective approval of Bitcoin ETFs could refocus mainstream attention on the cryptocurrency market. The industry is eagerly awaiting a potential approval window, expected between January 5 and 10, 2024.
