Jannat Ara

SEC Nears Bitcoin ETF Approval: Analysis on Potential Impact and Goldman Sachs’ Projections

The anticipation surrounding the potential approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC) continues to dominate crypto discussions. Speculations and analyses from experts shed light on what could unfold once the regulatory nod arrives and the broader market implications in the coming year.

Amid expectations of an imminent decision, traders and analysts speculate on Bitcoin’s trajectory post-ETF approval. Notably, renowned analyst DonAlt suggests a probable “sell-the-news” reaction post-announcement on Jan. 10, envisioning a prolonged consolidation phase for Bitcoin. However, he remains confident that the price might not plunge significantly below $20,000.

Contrarily, Greeks.live suggests that the market might have already factored in the potential ETF approval. Their analysis, based on implied volatility (IV) and Bitcoin’s current price, implies that even with the ETF’s approval, the impact on Bitcoin’s value might not be as significant as anticipated.

Observations on Jan. 12 highlighted a decline in implied volatility despite expectations of a correlation between options IV and the Bitcoin ETF. This subdued volatility coupled with the market’s minimal movements suggests that the expected approval might not yield substantial price shifts for Bitcoin.

Meanwhile, Goldman Sachs foresees considerable growth potential in the cryptocurrency market, particularly emphasizing the outlook for Bitcoin and Ether ETFs. Managing director Mathew McDermott from Goldman Sachs anticipates a gradual transformation over the coming year, contingent upon regulatory green lights.

Key players like BlackRock and Fidelity await the SEC’s decision on their BTC ETF applications, fostering optimism for institutional investments in Bitcoin. McDermott underscores the gradual integration of blockchain technology in commercial applications and the increased involvement of traditional financial institutions in the crypto space as drivers for growth.

McDermott’s vision extends into 2024, emphasizing the rise of tokenization marketplaces and their appeal to investors, fueled by enhanced on-chain liquidity. These advancements are anticipated to bolster the crypto market, contributing to its expansion and maturation in the years ahead.

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