Analysis of the Potential Approval of a Bitcoin ETF by the US SEC

Analysis of the Potential Approval of a Bitcoin ETF by the US SEC

The US Securities and Exchange Commission (SEC) may soon notify asset managers about the approval status of their spot Bitcoin ETF applications, according to a recent report from Reuters. This news has generated anticipation and speculation within the cryptocurrency market. While some experts believe that the approval of a Bitcoin ETF could have a significant impact on the price of Bitcoin, others argue that the market may have already priced in this information.

Reuters reported that the SEC may send notifications to the 14 Bitcoin ETF applicants by Tuesday or Wednesday of next week, ahead of the January 10 deadline. Asset managers that met their filing revision deadlines at the end of the year could potentially launch their ETFs by January 10, 2024. Notable firms that recently updated their Bitcoin ETF filings include BlackRock, Van Eck, Bitwise, WisdomTree, Invesco, Valkyrie, and Fidelity. Fidelity Investments, in particular, disclosed more information and technical details about its ETF product and proposed the lowest sponsor fee at 0.39%.

The possibility of the SEC approving multiple Bitcoin ETF applications by January 10 has led to increased optimism in the market. Some experts believe that the approval of a Bitcoin ETF could have a positive impact on the value of the premier cryptocurrency. However, options platform Greeks.live suggests that the market may have already priced in this information. Based on options data and implied volatility, Greeks.live argues that the approval of a Bitcoin ETF may not result in significant price movement.

Greeks.live analyzed options data and implied volatility to gauge the market’s expectation of the impact of a Bitcoin ETF approval. The platform found that the major term implied volatilities and the price of Bitcoin showed little volatility and even decreased for options expiring on January 12. This suggests that the market may not expect a substantial impact on the Bitcoin price, regardless of the news regarding the ETF approval.

As of the time of writing, Bitcoin is valued at $42,154, reflecting a mere 0.4% increase in the past day. This year, the price of Bitcoin has surged by more than 150%, partly driven by the anticipation of a Bitcoin spot ETF. However, the lack of significant price movement leading up to the potential ETF approval raises questions about the immediate impact on the Bitcoin price.

The potential approval of a Bitcoin ETF by the US SEC has garnered attention and speculation within the cryptocurrency market. While some market participants anticipate a positive impact on the Bitcoin price, others suggest that the market may have already priced in this information. The analysis of options data and implied volatility indicates that there may not be substantial price movement following the ETF approval. As the market awaits the SEC’s decision, investors are advised to conduct their own research and consider the risks associated with cryptocurrency investments.

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