Is A Bitcoin Spot ETF Approval A Sell The News Event? Experts Respond
January 02 2024 - 7:05PM
NEWSBTC
All attention of crypto investors has turned toward January 10 when
the first Spot Bitcoin ETF is expected to be approved. As usual,
the excitement triggered by this has seen prices recover across the
space, with no doubt about the bull sentiment leading up to the
event. However, arguments have arisen about whether this bullish
sentiment would continue if a Spot ETF is eventually approved or if
it will end up being a “sell the news” event. What Is A Sell The
News Event? The phrase “sell the news” is popular in investing
circles and is usually associated with a major event that ends up
moving prices. BlackRock and 12 other asset managers filing for
Spot Bitcoin ETFs with the US Securities and Exchange Commission
(SEC) is an example of such a major event. Related Reading: XRP
Price Surge: Crypto Analyst Predicts Various Bullish Scenarios In
The Coming Days When the event is positive, it has a good impact on
assets in the industry, and in the case of crypto, the prices of
Bitcoin and other cryptocurrencies begin to rise. This is usually
from the anticipation surrounding the event and investors taking up
positions in order not to miss a major move. Mostly, this is
because investors expect that the main event, such as the approval
of a Spot Bitcoin ETF, would trigger further price increases.
However, this is not always the case for the market. There have
been instances where the main event actually sees prices fall
across the board. Such a case is referred to as a “sell the news”
event as prices are expected to decline as the euphoria reaches its
climax. The potential approval of a Spot Bitcoin ETF has been
argued to be a ‘sell the news’ event by many in the space, given
that prices have already gone up so much. However, not everyone
believes this is the case as crypto experts begin to chime in. BTC
price declines to $45,000 Source: BTCUSD on Tradingview.com
Spot Bitcoin ETF Not A Sell The News Event One of the first crypto
experts to share their thoughts around this is Andrew Kang. Kang
took to X (formerly Twitter) to explain that the Bitcoin price is
actually still mispriced even after rising more than 100% in one
year to cross $45,000. Kang explains that a Spot Bitcoin ETF
approval would see all of these asset managers trying to grab
between $10 and $20 billion in fees. They will also be pushing for
marketing which Kang believes every dollar spent on marketing in
2024 becomes even more important in 2025. “When you think about the
size of the opportunity, it shouldn’t surprise us to see
marketing/ad spend on the scale of 2021 bull madness,” Kang said.
“When you consider the importance of timing for issuers, maybe we
even take it a level further. It’s going to be a bonanza.” Related
Reading: Crypto Analyst Says History Shows What Might Be Next For
Bitcoin, But Is It Good Or Bad? Also responding to and buttressing
Kang’s point is @ChainLinkGod who gave their own insight into how
bullish an approval is. They explain that all of the asset managers
who have filed for Spot ETFs are inherently long on Bitcoin. “Yes,
they don’t technically have any directional exposure, but all else
equal, a 10x in the price of bitcoin is a 10x in yearly management
fees,” ChainLinkGod explains. They further add that each applicant
will be looking to become the dominant player as this means they
will be able to harvest billions of dollars in fees passively for
years. “All of which involves massive ad spend, shilling $BTC at
every public appearance, and advising all their clientele *this
year* to get exposure to $BTC via their ETF,” they explain. Given
this, a potential approval is more bullish than bearish for Bitcoin
as the players struggle for dominance. Featured image from
Investopedia, chart from Tradingview.com
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