Bitcoin (BTC) reached its highest levels in 17 months on October 24th, fueled by excitement over the potential launch of a Bitcoin spot price Exchange-Traded Fund (ETF). BTC/USD hit $35,198 on Bitstamp, marking a 17% increase since the previous week’s close and the highest level for Bitcoin since May 2022.
The possibility of a Bitcoin spot price ETF being launched in the United States has been highly anticipated for years. Recently, data for the iShares Spot Bitcoin ETF appeared on the Depository Trust & Clearing Corporation (DTCC) website, responsible for clearing Nasdaq trades. Although no official approval has been given yet, the general sentiment is that it’s only a matter of time.
The anticipation for the ETF launch has led to significant inflows into public Bitcoin ETFs worldwide. In just 24 hours, these ETFs saw inflows equivalent to 10% of the total inflows for the entire year. This indicates the strong demand and belief in the potential of Bitcoin as an investment.
Financial commentary resource, The Kobeissi Letter, commented on the recent surge in BTC/USD, highlighting that Bitcoin has gained 107% year-to-date and added $300 billion in market cap. The letter also noted that Bitcoin is being viewed as a safe haven asset, particularly as geopolitical tensions worsen.
However, despite the bullish price action, some traders and analysts remain cautious. They pointed out that all the upside gaps in the CME Group Bitcoin futures have been filled, indicating a potential downside risk. There is a psychological boundary at $20,000, which is also where a CME gap is located. This downside target is still being considered by many analysts.
Some market participants have taken advantage of the recent price surge to take profits. They believe that the price movement reflects the urgency of buyers to enter the market and they are using this opportunity to sell their holdings.
Traders and analysts also speculated on the potential impact of the ETF approval. They suggested that the price may experience a “sell the news” event, with market participants who have been waiting for the official announcement rushing to buy in. This could lead to a short-term price correction.
Despite the excitement surrounding the ETF speculation, some remain skeptical. They believe that the recent price increase is not fundamentally different from previous upside cycles. They also highlighted the possibility of Bitcoin experiencing a significant downturn in the first quarter of 2024, based on previous price cycles.
In conclusion, Bitcoin reached 17-month highs fueled by the anticipation of a Bitcoin spot price ETF launch in the United States. The market sentiment was optimistic, and significant inflows were observed in public Bitcoin ETFs. However, caution remains among traders and analysts, who mentioned potential downside risks and the possibility of a short-term price correction after the ETF announcement.