Bitcoin is on the way back up today as renewed ETF excitement fills the cryptosphere: various brokerages and exchanges are apparently beginning to list ETFs in anticipation of the SEC’s approval.
By midday on Wednesday, investors started sharing screenshots of their brokerage accounts on eTrade and Fidelity showing that the tickers for several Bitcoin ETFs had already been added.
To be clear: It’s not a sign that anything has yet been approved. But it’s telling that the brokerages feel confident enough that an approval is imminent to start listing the ETFs.
At the time of writing, Bitcoin is trading at roughly $46,300, according to CoinGecko. That means BTC is already where it was yesterday—and then some—before a false alarm rattled markets.
This follows a wild few hours of trading on Tuesday evening Eastern Time when Bitcoin traders appeared to sell the news—even if yesterday’s SEC announcement about Bitcoin ETF approvals was fake.
Bitcoin briefly skyrocketed above $48,000 within 5 minutes of a false announcement saying that all Bitcoin ETF applications had been approved. Very soon after—but before there was any official warning that the SEC’s Twitter account had been compromised—the price dropped.
The sudden dip and the fact it occurred before word got out that the tweet was fake confirms that investors were “selling the news,” or trying to take advantage of a very bullish development, Finequia Research Analyst Matteo Greco told Decrypt.
“This pattern is typical in the market, where participants buy in the days leading up to a news event and then sell when the news becomes officially public,” he said.
But traders can’t sell what they don’t have. And there’s plenty of evidence that investors have been in accumulation mode for months. One side effect: Bitcoin dominance surged last year, meaning that the price of Bitcoin increased relative to Ethereum and altcoins.
“Bitcoin dominance rose in 2023 with a flight to quality and as the market grew increasingly bullish about the approval prospects for spot bitcoin ETFs,” wrote the on-chain intelligence firm in a report on Monday. “Some market participants also view the April 2024 BTC halving as a potentially positive price catalyst.” The halving refers to an event that occurs on the Bitcoin blockchain roughly every four years—mining rewards are cut in half, decreasing the amount of new coins entering the market.
And as many analysts have pointed out, a Bitcoin halving has always preceded a bull run.
Before the first halving of 2012, BTC was priced at $12.35; one year later the price of the coin stood at $964. The next halving on July 9, 2016, BTC was trading hands for $663. Again, one year later, it had shot up in value and was priced at $2,500.
And at the latest halving, which took place on May 11, 2020, BTC was valued at $8,500. A bull run followed the next year and the biggest digital coin exploded to an all-time high the next year.
All the panic late yesterday sent trading volumes up to $40 billion in a 24-hour period. Volumes haven’t been that high since last week, when a bearish market report predicted that the SEC would reject all pending Bitcoin ETF applications.
As of yesterday afternoon, even formerly skeptical K33 Research, a crypto brokerage, reversed its expectation that traders would sell the news when (and if) a Bitcoin ETF approval gets announced.
“The liquidation cascade on January 3 drastically improved the state of the market,” K33 analysts Anders Helseth and Vetle Lunde wrote, referring to the bearish report from Matrixport that spooked traders. “Last week, we argued that traders would seek to realize profits following the announcement, with snowballing long liquidations adding gasoline to the fire, deepening the selloff.”
“Following the deleveraging of last week,” the report added, “the market is more robust to handle profit realization on the ETF announcement.”
Edited by Guillermo Jimenez.
