The price of Bitcoin has recently slowed down its ascend after a week of smashing critical resistance levels. However, despite the temporary pause, many experts believe that the rally is only in its early stages, with BTC preparing to see further profits in the coming months. As of this writing, the cryptocurrency trades at $43,300, reclaiming levels last seen in 2022 before the crash to its yearly lows.
In the weekly chart, BTC records a 15% rally, with Ethereum following the trend while other altcoins lagged behind the two most prominent cryptocurrencies. The crypto market has witnessed another remarkable surge in Bitcoin (BTC), with a 15% increase in just the first week of December. According to QCP Capital’s latest market update, this growth takes BTC’s year-to-date (YTD) gain to 260%. This exponential rise is primarily attributed to the anticipation surrounding the approval of a spot Bitcoin Exchange-Traded Fund (ETF) by the U.S. Securities and Exchange Commission (SEC).
On December 1st, the SEC announced that January 5th, 2024, will be the final deadline for rebuttal comments, setting the stage for probable approval in the week following. Although the significance of the 15th anniversary of Bitcoin’s Genesis block on January 3rd, 2024, might be lost on the SEC, the market has certainly taken note. Investors are now speculating on how much of this news has already been priced in as Bitcoin nears the $45,000 mark.
The post-ETF approval period will be critical as the real impact depends on the actual flows from the ETF in its initial trading weeks. There is a possibility of a ‘sell-the-news’ event next year if expectations don’t align with reality. The December 1st announcement has also spurred renewed interest from Asian buyers, who had been less active in the preceding month.
The Expansion of the Traditional Finance Ecosystem
As the market prepares for the launch of the spot ETF, investors can expect a significant expansion of options. With 13 applications for spot ETFs and several others for leveraged and options-based ETFs in the pipeline, the traditional finance ecosystem surrounding BTC and soon ETH is poised for substantial growth. In a market characterized by low costs and tight spreads, structured products might emerge as a key asset class for generating alpha, similar to other markets like gold, according to QCP Capital. This indicates that even if spot BTC tops on its launch day, the Traditional Finance ecosystem boom around BTC and ETH will continue to thrive.
The Altcoin Catch-Up
A report from the Glassnode co-founders suggests that the altcoin sector is already trying to catch up with the current BTC price action. While Bitcoin continues to steer the ship, a closer look reveals the total altcoin market cap playing catch-up. The current pullback could provide an opportunity for smaller coins waiting to benefit from the bullish momentum.
Bitcoin’s recent rally and anticipation for the approval of a spot Bitcoin ETF have propelled it to reclaim previous price levels and achieve significant gains. The market is eagerly awaiting the SEC announcement and preparing for the potential expansion of the traditional finance ecosystem surrounding BTC and ETH. Meanwhile, altcoins are trying to catch up with Bitcoin’s price action, presenting an interesting opportunity for investors. Overall, the cryptocurrency market continues to evolve and offer new opportunities for investors looking to capitalize on the rise of digital assets.
