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Bitcoin‘s price may have returned to $42,000, but there are plenty of reasons for investors to remain optimistic in the medium and long term. The latest report published by K33 adds to the excitement for the coming days. As January is just around the corner, let’s discuss the market experts’ expectations.
Spot Bitcoin ETF
According to the latest report by K33 Research, the date for the approval of spot Bitcoin ETFs is now confirmed for January 10th. Experts now seem certain that the end of the road is near, due to file updates showing acceptance of the cash creation setup before the end of January.
Yesterday, BlackRock submitted a modified prospectus (S-1) to the Securities and Exchange Commission, including a new cash redemption model preferred by other analysts. Galaxy’s CEO claimed that approval could come even before January 10th. If approved, BlackRock’s Spot Bitcoin ETF will trade under the ticker “IBIT”.
K33 Senior Analyst Vetle Lunde and Vice President Anders Helseth wrote;
“Cash creation is not the most efficient structure, but the filers’ updates are another signal in favor of ETF approvals within the next three weeks.”
James Seyffart, an ETF research analyst at Bloomberg Intelligence, reiterated that the final date for a potential spot Bitcoin ETF approval would be between January 8th and 10th. Since October, they have been talking about a 90% probability of approval by January 10th.
The Future of Cryptocurrencies
Analysts say the recent rally managed to attract buyers for BTC, but there are also those who managed to sell for profit without causing much price fluctuation. On the other hand, while open interest increases on the CME side, there isn’t as much demand on crypto derivative exchanges. This confirms analysts’ claims that allegations of a price bubble are unfounded.
Due to excessive demand from institutional investors on the Chicago Mercantile Exchange, transactions continue with a 17% annual premium compared to 12% the previous week, indicating excessive institutional demand before the ETF.
However, Lunde and Helseth expect a significant rotation from the CME futures-based ETF to spot Bitcoin ETFs upon approval. Combined with profit-taking strategies, this could reduce CME’s market dominance and current volume could drop by up to 50%. The exciting part is the possibility of the market liquidity doubling as volume shifts to the spot ETF side.
