ETF Anticipation
The anticipation surrounding the approval of spot-based ETFs for Bitcoin has been a focal point in recent market movements, with Bitcoin showing resilience within broader economic uncertainties.
According to Coinbase, the differential performance between Bitcoin and other tokens suggests that the potential approval of spot-based exchange-traded funds (ETFs) has already been factored into Bitcoin’s price to some extent.
Since the filing for spot-based BTC ETFs by traditional finance giants like BlackRock in mid-June, Bitcoin has raised by 8%, while Ethereum has experienced a 7.5% decline during the exact same period.
Despite adverse developments in the U.S. Treasury yield curve, Bitcoin has maintained its upward trajectory, indicating that factors beyond traditional market indicators are at play. All of this underscores the significance of ETF expectations in the BTC market.
Duong highlighted the emergence of a deviation in market dynamics since mid-June, coinciding with multiple filings for spot-based bitcoin exchange-traded product ETPs in the U.S.
Going forward
The long-awaited approval of spot-based bitcoin ETFs holds the promise of unlocking mainstream investment, potentially generating $30 billion in new demand, according to NYDIG.
Coinbase’s analysis suggests that once approved, Bitcoin may experience a temporary loss of its competitive edge over the broader market, similar to the post-launch trends observed with futures-based ETFs in October 2021. However, Duong cautioned that significant net inflows into Bitcoin may take time to materialize, citing historical precedents such as the SPDR Gold Shares ETF (GLD).
GLD, the first spot gold ETF, experienced modest initial inflows of $1.9 billion within the first 30 days of its launch, gradually rising to $4.8 billion within the first 12 months. This is positive sign for Bitcoin.
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