Bitcoin’s trajectory has taken an upward surge, breaking the $45,000 barrier for the first time in nearly two years. This marks a pivotal moment as anticipation grows around the likely approval of a spot Bitcoin exchange-traded fund (ETF). With a rapid climb from $42,000 on January 1, Bitcoin has exhibited a significant price rally, increasing over 7% in the last 24 hours and 170% over the previous year.
Cryptocurrency entrepreneur Andrew Kang brought attention to this phenomenon with a recent tweet, suggesting that the current pricing of Bitcoin at $45,000 doesn’t fully reflect the potential influx of ETF-related capital and the excitement surrounding the upcoming halving event. Kang argues the market might be underestimating the immediate impact of ETF inflows.
Drawing parallels with gold ETFs, he underscored the fierce competition among ETF issuers to secure a share of future fees, estimated between $10-20 billion. Kang emphasized the strategic importance of early customer acquisition in asset management and predicted a marketing frenzy reminiscent of the 2021 bull run.
This optimistic stance echoed Kang’s previous comments on the Bitcoin spot ETF filing by Blackrock, which he regarded as significantly positive news. Yet, the muted market response at the time, with only a 6% increase in Bitcoin’s price, was perceived by Kang as mispricing.
As of now, contrasting viewpoints are circulating within the market about the immediate impact of an ETF approval. Analysts from Greeks.live suggest that Bitcoin might not see a substantial rally on approval day, citing decreasing implied volatility in Bitcoin options. However, major traders, including Scott Melker, popularly known as the wolf of all streets, believe Bitcoin is forming a bullish pattern, predicting a possible spike to $54,000 post-ETF approval.
However, VanEck advisor Gabor Gurbacs expressed a cautious perspective on the initial impact of a spot Bitcoin ETF, indicating that the early response might fall short of heightened market expectations. Despite this, he maintained a belief in the potential for significant capital inflows over an extended period.
