With the deadline for the approval or rejection of the Bitcoin ETF prediction approaching, the volatility of the Bitcoin price has reached a new high in nearly two years, and there has also been a significant increase in on-chain activity in whale wallets. But is the approval or rejection of the Bitcoin ETF really important? Venture partner Adam Cochran believes that the short-term impact may not be significant.
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The market has long been ready
Bitcoin price volatility soaring
Continued growth in whale activity
Bloomberg ETF analyst: Gensler has no reason to reject
Adam Cochran: Bitcoin ETF will have a long-term impact
More Bitcoin ETF reports
As the US Securities and Exchange Commission (SEC) is about to approve or reject the Bitcoin spot ETF, the crypto community has noticed the significant volatility in the cryptocurrency market recently, as well as the continuous growth in on-chain whale activity, which has historically been a precursor to a market about to experience drastic volatility.
According to analysts at Bitfinex, the recent surge in implied volatility of Bitcoin indicates that derivative traders are preparing for unprecedented price fluctuations in Bitcoin.
The Block Data: Bitcoin Implied Volatility
The analyst revealed that signals from the options market in recent weeks indicate that derivative traders’ expectations for Bitcoin price volatility have reached the highest level since 2023, especially after setting a record high options trading volume in December.
Another observation from crypto market intelligence platform Santiment shows that the recent trading volume of whales has reached the highest level since June 2022.
The company stated that with the surge in whale trading volume, there may be some volatility in the market in the future, which often indicates a cycle of price breakthroughs.
With several asset management companies submitting Bitcoin ETF applications, it is expected that they will make final revisions to their documents by this morning (January 8).
Eric Balchunas, a senior ETF analyst at Bloomberg who remains bullish, believes that the voting phase that SEC commissioners may take next is imminent, and that Chairman Gary Gensler will have no reason to reject it:
“It’s hard to imagine Gary voting against it if there’s really a vote. On the one hand, he lacks substantive reasons to reject it, and on the other hand, he has previously had extensive interactions and negotiations with 11 Bitcoin ETF issuers through the SEC staff, indicating that Gensler has an open attitude towards its development.”
Eric further added that Gensler recently told SEC staff that he hopes the above negotiations and comments can be released on January 11.
However, he also reminded that in the SEC’s public agenda, the agency has not scheduled any meetings before January 11, but it can still make decisions through the same “delegated authority policy” as before, by designated personnel.
On the other hand, venture partner Adam Cochran believes that most people are too focused on the short-term price impact of the Bitcoin ETF and overlook its potential long-term impact.
“Imagine that within the next year, investment advisors will recommend that their clients invest a small portion (e.g., 1%) of their funds in a Bitcoin ETF, especially considering the high returns on Bitcoin in the second half of 2023.”
He also emphasized that the product structure of a spot ETF will help improve the market’s health and encourage long-term holdings, reducing extreme volatility:
“The pace of this growth will be slow enough to make you doubt, but until you turn around and see that the price of Bitcoin has risen to $500,000, and you are still waiting for a significant pullback.”
Bitcoin ETF will bring market manipulation and fraud risks to more investors.
US non-profit organization criticizes Bitcoin spot ETF again: worthless gambling chips.
BlackRock expects Bitcoin spot ETF to be approved on January 10, with $2 billion funds at stake.
Adam Cochran
Eric Balchunas
Gary Gensler
SEC
Bitcoin spot ETF
Further reading:
Global ranking of Bitcoin ETF popularity, with Luxembourg and Singapore leading, China and the US lagging behind.
US non-profit organization criticizes Bitcoin spot ETF again: worthless gambling chips.