Daisy Watts 
Jan 09, 2024
Bitcoin has surged to its highest value in two years amidst swirling speculations of an imminent influx of institutional investor funds into the crypto market.
The forefront cryptocurrency faces a pivotal juncture as the US Securities and Exchange Commission (SEC) deliberates on the approval of the initial wave of bitcoin exchange-traded funds (ETFs).
The eagerly anticipated arrival of bitcoin spot ETFs holds the promise of a substantial surge in demand, signalling a milestone in validating the cryptocurrency as a mainstream, regulated asset. Conversely, a rejection from the SEC threatens a potential market downturn.
On January 9th, Bitcoin soared above $47,000, marking a 10% surge since the beginning of 2024, although still distant from its peak at $68,000 in November 2021.
This recent price rally follows a robust 2023, witnessing Bitcoin's value skyrocket by over 150% against the US dollar.
The broader crypto market has also experienced significant gains, with the collective market cap of all crypto assets swelling by nearly $1 trillion over the past year.
The SEC decision, initially expected on Monday, was delayed as the regulator issued additional comments on the application, interpreted by some as a positive signal. However, others caution about potential regulatory hindrances.
Prominent Bitcoin advocate Perianne Boring expressed concern on X (formerly Twitter), suggesting the SEC might have tools to impede spot Bitcoin ETFs' market entry.
Some crypto analysts anticipate that a favourable SEC decision could drive Bitcoin's value to surge by more than 300% by the end of the following year.
Geoff Kendrick, head of FX Research at Standard Chartered Bank, proposed in a research note that with expected ETF-related inflows, a year-end 2025 level nearing $200,000 could be feasible.
The SEC is anticipated to deliver its verdict on the Bitcoin Spot ETFs by January 10th, deciding the fate of up to 13 applicants simultaneously to prevent favouritism.
Simon Peters, a market analyst at eToro, highlighted the anticipation surrounding the potential approval, suggesting it could open doors for institutional investors otherwise restricted from entering the crypto space.
However, some voices caution that even a favourable SEC decision might trigger a significant sell-off, adhering to the adage "buy the rumour, sell the news."
Matteo Greco, a research analyst at Fineqia International, attributed the market's tumultuous nature to the pending SEC decision on BTC Spot ETFs. He highlighted the increased trading volume, reaching approximately $1.1 trillion in December 2023, reflecting heightened volatility correlating with elevated trading.
