Bitcoin is back on the rise today as renewed excitement for ETFs fills the cryptocurrency world: It appears that many brokerages and exchanges have begun listing ETFs in anticipation of SEC approval.
By midday on Wednesday, investors began sharing screenshots of their brokerage accounts on eTrade and Fidelity showing that indices for several Bitcoin ETFs had already been added.
To be clear: This is not a sign that nothing has been approved yet. But interestingly, brokerages feel confident enough that approval is imminent to start listing ETFs.
At the time of writing, Bitcoin is trading at approximately $46,300, according to CoinGecko. This means that Bitcoin has already reached where it was yesterday – and then – before a false alarm rocked the markets.
This comes after a few hours of trading Tuesday evening ET when Bitcoin traders appeared to be selling the news — even if yesterday’s SEC announcement regarding Bitcoin ETF approvals was fake.
Bitcoin briefly rose above $48,000 within 5 minutes of the false announcement that all Bitcoin ETF applications had been approved. Very soon after – but before there was any official warning that the SEC’s Twitter account had been hacked – the price fell.
The sudden decline and the fact that it occurred before news emerged that the tweet was fake confirms that investors were “selling the news” or trying to take advantage of a very bullish development, said Matteo Greco, Finicia Research analyst. Decryption.
“This pattern is typical in the market, where participants buy in the days leading up to a news event and then sell when the news officially becomes public,” he said.
But merchants cannot sell what they do not own. There is plenty of evidence that investors have been in accumulation mode for months. One side effect: Bitcoin dominance has surged in the past year, meaning the price of Bitcoin has risen compared to Ethereum and altcoins.
“Bitcoin dominance surges in 2023 with a trend toward quality and as the market grows more optimistic about the approval prospects for spot Bitcoin ETFs,” the on-chain intelligence firm wrote in a report on Monday. “The Bitcoin halving in April 2024 is also viewed by some market participants as a potential positive price catalyst.” Halving refers to an event that occurs on the Bitcoin blockchain approximately every four years – where mining rewards are cut in half, reducing the amount of new coins entering the market.
As many analysts have pointed out, a Bitcoin halving always precedes a rise.
Before the first half of 2012, the price of Bitcoin was $12.35; One year later, the price of the coin reached $964. In the following halving on July 9, 2016, BTC traded for $663. Again, after one year, its value increased and reached $2,500.
In the last halving, which occurred on May 11, 2020, BTC reached $8,500. A bullish rally followed the following year, and the largest cryptocurrency exploded to an all-time high the following year.
All the panic that occurred late yesterday sent trading volumes reaching $40 billion within a 24-hour period. Trading volumes haven’t been this high since last week, when a bearish market report predicted that the SEC would reject all pending Bitcoin ETF applications.
As of yesterday afternoon, even K33 Research, a previously skeptical cryptocurrency brokerage, reversed its forecast that traders will sell the news when (and if) approval of a Bitcoin ETF is announced.
“The series of liquidations on January 3 led to a significant improvement in the market situation,” analysts Anders Helseth and Vetel Lund wrote at K33, referring to the bearish report from Matrixport that spooked traders. “Last week, we said traders would seek profits following the announcement, with longer-dated liquidations adding to the sell-off.”
The report added: “After deleveraging last week, the market has become more robust to deal with achieving profits when ETFs are announced.”
Edited by Guillermo Jimenez.