Digital-asset manager 3iQ predicts that once the U.S. Securities and Exchange Commission (SEC) gives the green light to an exchange-traded fund (ETF) directly investing in cryptocurrency, Bitcoin could surge to a staggering $45,000 in January.
Earlier this week, a false report from Cointelegraph falsely claimed that BlackRock’s bitcoin ETF application had been approved by the SEC. This temporarily drove Bitcoin up 10% to nearly $30,000 before it relinquished most of its gains, according to CoinDesk data. As of Monday afternoon, Bitcoin was trading at approximately $28,724, reflecting a 6% increase from the previous 24 hours.
Although the report turned out to be false, Bitcoin’s momentary rally serves as proof that the market has yet to factor in the potential impact of an approved spot bitcoin ETF, noted Steven Lubka, head of private clients and family offices at Swan Bitcoin.
“This actually provides strong evidence that, when the approval does happen, we can expect a significant price rally. Perhaps it will unfold more gradually as word begins to circulate,” said Lubka.
Although the SEC has previously given the go-ahead to several bitcoin futures ETFs, it has refrained from approving any based on bitcoin itself due to concerns about susceptibility to market manipulation.
Bitcoin ETF Approval Expected by Jan. 10, 2024
Market participants are eagerly awaiting the decision on ARK Invest and 21Shares’ bitcoin ETF application, which is expected to be approved by January 10, 2024. This approval will have significant implications for the cryptocurrency market.
Unlocking Opportunities and Providing Regulatory Clarity
The approval of a spot bitcoin ETF would enable new investors to enter the market, further expanding its reach. This influx of money from institutional investors will likely drive up the price of bitcoin significantly. Moreover, it would bring greater regulatory clarity to the cryptocurrency industry in the United States.
Potential Price Surge
According to Mark Connors, the head of research at 3iQ Corp, if a bitcoin ETF is approved, it could push the crypto’s price between $35,000 and $45,000. Connors arrived at this estimation by analyzing bitcoin’s 200-day moving average and 200-week moving average.
Rise in Bitcoin-Related Funds
In anticipation of the bitcoin ETF approval, bitcoin-related funds have experienced positive growth. On Monday, the Grayscale Bitcoin Trust GBTC saw a 7.9% increase, with its value reaching approximately $21.83. Notably, this fund is currently trading only 14% below the value of its underlying assets, representing the narrowest gap since 2021. Another fund, ProShares Bitcoin Strategy ETF BITO, which invests in bitcoin futures, also saw a rise of 6.5% to $14.51 on Monday.
The potential approval of a bitcoin ETF and the resulting increase in institutional investment signals a promising future for the cryptocurrency market. Investors and enthusiasts alike eagerly await the upcoming decision.