Bitcoin maintains a downward trend, the next round of upward movement requires spot ETF progress in January

Zhitong
2023.12.27 07:08
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Bitcoin is experiencing a pullback, and traders are evaluating whether regulatory agencies will approve the first batch of exchange-traded funds (ETFs) that directly invest in Bitcoin. Investors are eagerly anticipating the approval of spot Bitcoin ETFs, but it is still uncertain whether the actual approval will stimulate arbitrage. The founding partner of Castle Island Management LLC predicts that the U.S. Securities and Exchange Commission (SEC) will approve spot Bitcoin ETFs before January 10th. Meanwhile, the rebound of Bitcoin has recovered from the crash in 2022, but it is still below the record set in 2021. Recently, smaller tokens like Avalanche and Solana have experienced larger declines than Bitcoin, while popular token Dogecoin has seen a decrease. The expectation of a decrease in U.S. interest rates has driven Bitcoin's rise this year.

Zhitong App learned that recently, Bitcoin has experienced a pullback. As of the close on December 26th, Bitcoin has fallen by nearly 3%. Traders are still evaluating how the cryptocurrency market will react if regulatory agencies approve the first batch of exchange-traded funds (ETFs) for direct investment in Bitcoin.

Bitcoin has had an excellent performance this year, with a cumulative increase of nearly 160%. Part of this increase is due to the new demand generated by investors' optimism about the approval of spot Bitcoin ETFs.

However, it is important to consider whether the actual approval of these products will stimulate arbitrage, as investors often "buy on the rumor and sell on the news." In other words, it is still unclear whether there is significant interest in spot Bitcoin ETFs planned by companies such as BlackRock and Fidelity Investments.

Nick Carter, founding partner of Castle Island Management LLC, stated on Bloomberg TV that it is "almost certain" that the U.S. Securities and Exchange Commission (SEC) will approve spot Bitcoin ETFs before January 10th. In the medium term, these funds will expand the base of cryptocurrency investors. At the same time, he also pointed out that there may be sell-offs triggered by news in the near future.

In the past 24 hours, smaller tokens such as Avalanche and Solana have experienced larger declines than Bitcoin. Popular tokens like Dogwifhat have also seen a decline, while Binance's token BNB has risen against the trend by about 10%.

Expectations of a decline in U.S. interest rates have also driven Bitcoin's rise this year. Bitcoin's rebound this year has recovered the losses caused by the cliff-like plunge in the cryptocurrency industry in 2022. However, Bitcoin is still below the record of nearly $69,000 set during the pandemic in 2021.

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