Will SEC Spot ETF Ruling Send Bitcoin Higher or Lower?

Original Title: "WHY THE BITCOIN PRICE WILL RISE OR FALL ON THE SEC'S SPOT ETF RULING"

Original Author: Reed Macdonald, Bitcoin Magazine

Translated by: Luccy, BlockBeats

Editor's Note:

Last night, Matrixport's report stated that all proposals are expected to be rejected by the SEC in January due to failure to meet key requirements. As soon as this news came out, the entire network liquidated within an hour, increasing to 451 million US dollars.

Related Reading: "A $450 Million Bitcoin Report?"

Why can the SEC's final decision on Bitcoin spot ETF cause a huge reaction in the cryptocurrency market? Cryptocurrency researcher Reed Macdonald reviewed the history of Bitcoin's relationship with ETFs in the past few years, pointing out the uncertainty of Bitcoin's future trend after the SEC ruling, and emphasized the importance of considering broader market dynamics. BlockBeats translated the original article as follows:

In 2023, Bitcoin's increase exceeded 150%, which caused a lot of attention on Wall Street, leading to companies competing to launch the world's first Bitcoin ETF.

Currently, all attention is focused on the decision of the US Securities and Exchange Commission (SEC) regarding the approval of the Bitcoin spot ETF, which is scheduled to be listed on January 10th.

If past events can provide some reference, this decision will have a significant impact on the price of Bitcoin, although whether it is positive or negative remains to be seen.

Price Increase Possibility

Supporters of Bitcoin ETF believe that if approved by the SEC, it will bring a lot of opportunities for institutional and retail investment, and drive the price of Bitcoin to new highs.

History has provided us with an opportunity to gain insight into how ETFs are expected to affect the price of Bitcoin.

In 2017, the price of Bitcoin soared to over $1400, partly due to people's expectations of the first Bitcoin ETF. This was an increase from the previous year's low point of around $600.

At that time, investors believed that the introduction of a Bitcoin ETF would make it easier for institutional funds to enter the market, triggering a buying frenzy. However, the SEC ultimately rejected the proposal, causing the price of Bitcoin to plummet.

Within a few days, the price of Bitcoin has fallen back below $1000.

However, ultimately, the launch of Bitcoin futures in 2017 sparked new attention, and the market soared to over $20,000 that year.

From the CME Bitcoin futures announcement to listing, the price has risen.

For example, we can fast forward to 2021, when Bitcoin once again rose to a new all-time high, reaching over $60,000.

This time, the rise was driven by the successful launch of Bitcoin futures ETFs in Canada and Europe. These ETFs allow investors to gain exposure to Bitcoin without directly holding the cryptocurrency. Expectations for similar products to be launched in the United States have fueled bullish sentiment.

Finally, earlier this year, when false ETF approval news spread, the price of Bitcoin rose thousands of dollars in just a few minutes, indicating that once approved, it could bring volatility to the upside.

ETF approved false news led to the surge in Bitcoin price.

Price Decline Possibility

On the other hand, some believe that the approval of a Bitcoin ETF may trigger a price adjustment.

Some market experts are concerned that ETFs may become targets for short sellers, leading to increased volatility, or that ETFs may become "sell the news events".

In addition, the approval of Bitcoin ETFs may result in stricter regulatory scrutiny of the entire cryptocurrency market. This enhanced regulation could lead to increased taxation, higher reporting requirements, and potential limitations on the use of Bitcoin, which could dampen investor enthusiasm.

In addition, some people believe that the market may have already priced in the possibility of a Bitcoin ETF approval, and any rejection decision could lead to disappointment and selling similar to the rejection of the Winklevoss Bitcoin ETF in 2017.

After the rejection of ETF in 2017, the price of Bitcoin was sold off.

The Bitcoin community is eagerly awaiting the SEC's final decision, but it's important to remember that this is just one of many factors that affect the price of Bitcoin.

The market sentiment, macroeconomic conditions, and geopolitical events will also play a role in shaping the future of Bitcoin.

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