Bitcoin Volatile After SEC Approves Spot Bitcoin ETF

On January 10, the United States Securities and Exchange Commission (SEC) finally granted approval for all the pending applications for spot Bitcoin exchange-traded funds (ETFs).

This decision follows the recent Bitcoin price fluctuations on January 9 due to an incorrect tweet from the regulator claiming approval, and today, Bitcoin's price continues to show volatility.

Earlier in the day, a new wave of filings indicated that the ETFs were likely to be approved, leading to a rally in Bitcoin's price, reaching $46,437.

Furthermore, investor confidence received a boost as the Cboe approved the listings.

The cryptocurrency market has been positively influenced by the anticipation of approval for a spot Bitcoin ETF.

However, some traders anticipate that once the approval is confirmed, it may result in a "buy the rumor, sell the news" type of event. Some even doubt whether the approval will drive Bitcoin's price above $48,000.

Following reports that the SEC's social media account was hacked on January 9, up to $1 billion in open interest was wiped out in the Bitcoin futures market.

When it became clear that the spot ETF approval was not accurate, many in the market compared the incident to a pump-and-dump scheme.

The reduction in open interest in the market could be a reason why the price action on January 10 is less volatile than the previous day.

Some analysts suggest that the SEC might have violated market manipulation laws due to the hack, leading some U.S. senators to demand that SEC Chair Gary Gensler submit a report on the breach by January 15.

On January 10, as new information surfaced on the SEC's website, three significant Bitcoin sell orders were listed in the range of $46,100 to $48,000.

This led traders to speculate that there might be limited upside potential for Bitcoin's price.

While some analysts believe Bitcoin's price is indicating a potential breakout to $50,000, it's worth noting that Bitcoin has outperformed gold, more than doubling its returns in 2023, and this momentum has continued into 2024.

MicroStrategy chairman and Bitcoin advocate Michael Saylor has previously stated that a spot Bitcoin ETF would be a monumental development in the financial world, akin to the launch of the S&P 500.

Sources:

https://cointelegraph.com/news/why-is-bitcoin-price-volatile-today

https://www.sec.gov/Archives/edgar/data/1838028/000141783524000005/0001417835-24-000005-index.htm

https://twitter.com/JA_Maartun/status/1745135309497508229

https://cointelegraph.com/news/why-is-bitcoin-price-volatile-today