It is well known that the highly anticipated decision by the US Securities and Exchange Commission (SEC) regarding Bitcoin ETF applications has attracted significant attention from investors and cryptocurrency enthusiasts.
Speculation had mounted that the world’s largest asset managers’ ETF proposals would receive approval on Friday.
However, reports now indicate that one issuer has disclosed to FOX journalist Charles Gasparino that the SEC’s guidance on the BTC spot ETF is expected “hopefully next week,” possibly coinciding with the January 10 deadline.
Bitcoin ETF Approval Update
In a recent post on X (formerly Twitter), Gasparino claimed that as the SEC reviews multiple Bitcoin ETF applications, there may be slightly different timetables for decision-making based on when each application was filed. This means that the approval or denial of these index funds may not coincide.
The SEC remains tight-lipped about the specifics of their Bitcoin ETF decision-making process, leaving industry experts and investors eagerly awaiting the forthcoming guidance. Gasparino claimed on X:
Guidance on SEC decision on BTC “spot” ETF is that it’s coming “hopefully next week,” according to one issuer. Keep in mind may be slightly different timetables for decisions on applications based on when they were filed, or the SEC will do all at once. I don’t know
The anticipation of a positive Bitcoin ETF outcome has contributed to the recent surge in Bitcoin’s price, as investors hope for increased accessibility and regulatory validation by introducing ETFs.
Crypto trading firm QCP Capital has provided insights into the recent market dynamics leading up to this seminal Bitcoin ETF event.
Bitcoin And Ethereum Futures Surge
QCP Capital highlights that Bitcoin and Ethereum (ETH) funding and futures have been notably elevated, particularly in Q4 2023 and intensifying into 2024.
Perpetual swap funding rates on exchanges like Deribit surpassed 100% (annualized), while the spot-futures basis experienced significant expansion, with the 1-month spread reaching as high as 30%. Notably, these levels were reminiscent of BTC’s previous all-time high of $69,000 but were sustained for a longer period this time.
However, as reported by Bitcoinist, a deleveraging event occurred on January 3rd, following reports suggesting that the SEC might not approve the Bitcoin ETF due to the lack of a comprehensive Surveillance Sharing Agreement (SSA).
This news triggered a steep drop in BTC’s price, falling from $45,500 to $40,800 within an hour. The liquidations across markets totaled approximately $591 million.
Currently, resistance levels for BTC remain capped at $46,000 to $48,500, while support is identified in the $40,500 to $42,000 region.
ETH Emerges As Promising Opportunity Ahead
Despite the deleveraging event, BTC has shown resilience and climbed back to the $44,000 level. The market remains cautious of a potential “sell the news” reaction. Still, the ongoing price strength provides more confidence in the medium-term bullish view, particularly with BTC halving projected for March or April this year.
QCP Capital notes that cryptocurrency prices continue to decouple from traditional finance (TradFi) markets, primarily due to the bullish ETF narrative.
While rates markets are pricing in six cuts for 2024, contradicting the Federal Reserve’s (Fed) projection of three cuts, this “aggressive pricing” can swiftly unwind if new data points indicate a resurgence in job market strength or higher inflation, posing a significant macro risk to monitor.
As attention shifts towards the potential approval of the Bitcoin spot ETF, QCP Capital identifies ETH as an interesting laggard play. If the BTC spot ETF is approved, the focus will quickly shift towards an ETH spot ETF. Additionally, ETHBTC is currently positioned at a strong support level of 0.051.
QCP Capital suggests that one of the most apparent trading opportunities is selling the spot-futures basis spread, which remains highly elevated at around 12-20% annually.
Featured image from Shutterstock, chart from TradingView.com