Journalist
Posted:
- Experts believed that there was a high chance of approval of a Bitcoin ETF.
- The market was expected to see increased volatility in the wake of the approval.
The crypto market broke out of the low volatility regime in October, with several of the leading assets posting their best performances since May 2022 – the official start of the bear market.
The beginning of the bull market?
The market rally boosted the world’s largest cryptocurrency, Bitcoin [BTC]monthly gains to 28.34%, according to a report by digital asset manager Galaxy. Additionally, the sector benchmark Bloomberg Galaxy Crypto Index (BGCI) rose more than 20%.
The jump was primarily based on optimism over possible approvals of Bitcoin spot ETF applications by the US Securities and Exchange Commission (SEC).
In fact, the drama started when unconfirmed news of the approval of one of the many applications sent BTC soaring to almost $30,000.
Although the news was debunked as expected, the volatility and sudden surge led many experts to view the episode as a “dress rehearsal” before final approval. Since then, BTC has moved further north and was trading at $36,830 per year at the time of writing. CoinMarketCap.
The sentiment has been shaped by positive predictions from experts and entities monitoring the digital market. Bloomberg put the chance of approval at 90% on January 10, the earliest deadline for the first application.
What the approval of Bitcoin spot ETF means for the market
The Galaxy report outlined a list of likely scenarios for when the applications will be approved in the future. Based on history, it was predicted that the market would experience increased volatility in the aftermath of the crisis.
Furthermore, given the legal relief, the likelihood of Grayscale Bitcoin Trust (GBTC) turning into a spot ETF was also high. However, the potential conversion could also lead to downward pressure.
This was because existing shareholders would dump their shares and BTC held in escrow would be released into the market to raise capital.
Furthermore, ETH has seen lower growth compared to Bitcoin, as evidenced by the low ETH/BTC ratio of 0.052. But things could change dramatically as seasoned investors could start leaning towards ETH after Bitcoin’s adoption.
Read Bitcoin’s [BTC] Price forecast 2023-24
Although less publicized, ETH also entered the spot ETF race.
Meanwhile, Bitcoin continued to ride the bullishness. The number of bullish bets on the king coin continued to increase. Open Interest (OI) also rose to $7.2 billion, according to analyst firm Santiment.
🤑 #Bitcoinnow up +37% in two months, has seen the number of traders open #bullish positions (vs. #bearish) reaches a peak in three months. Additionally, total open interest on exchanges has increased to $7.2 billion. Ideal, $BTC will continue to rise thereafter #FOMO settles down. https://t.co/YImIUMGRyl pic.twitter.com/4TyZe5YfFz
— Santiment (@santimentfeed) November 8, 2023