"Strong demand for Bitcoin's first ETF will drive the price to $70,000"
Bitcoin´s made history again. The cryptocurrency scored another milestone by achieving the first exchange-traded fund in the digital asset world, based on futures, to pass all the formalities of the US Securities and Exchange Commission (SEC). ProShares is the firm that won the day, culminating nearly a decade of attempts by the ETF industry to launch such an investment vehicle.
As for the reaction in the 'crypto' market, for the moment neither large celebrations have taken place, nor have the promised new all-time highs arrived. Bitcoin is trading above its highest level in six months that it reached over the weekend, around $62,500, while awaiting the debut of the ETF that will trade on Wall Street under the ticker BITO. In the 'altcoins' the outlook is surprisingly downward for Ethereum, which is moving away from the nearly $4,000 reached over the weekend. The total capitalization exceeds $2.5 trillion.
Experts now point to strong demand for Bitcoin ETFs as what is needed to help Bitcoin break the record high of around $65,000 in April. "If traders view the Bitcoin ETF performance as promising, short-term resistance might come from the $70,000 level,"states Edward Moya, an analyst at Oanda. On the other hand, "lackluster trading volumes for the new Bitcoin ETF(s) could trigger a selloff into bear market territory," he adds.
The expert also points out that, initially, "this new wave of traders will most likely only have the ability to go long these new ETFs, so a buy the rumor, sell the event reaction won’t likely happen." In any case, "Cryptocurrencies will now play a larger role on Wall Street and that has brought Bitcoin within striking distance of record high territory," Moya declares, adding, "ETFs mean that this year Bitcoin interest could see several billions of dollars come under management which should keep the entire space buzzing."
"Now it's time to think about the next level, which the market psychologically places at the $100,000 figure," comments Alejandro Sala, country manager at Bitpanda. "Everything indicates that we are already in a new bullish cycle, what we don't know is its duration and its price limit."
In addition to ProShares, three other firms are hoping that the US regulator will not hinder their ETFs, namely Valkirie and VanEck, whose deadlines expire on the 25th. The U.S. supervisor does not need to take formal action to approve the applications. Under federal law, the applications can become effective automatically if the SEC allows a mandatory deadline to pass without requesting changes or ordering the would-be issuer to withdraw the filing.
Invesco, the firm that was due to learn Tuesday whether its exchange-traded fund would see the light of day has withdrawn from the race to issue a futures ETF. "We have decided not to launch a Bitcoin futures ETF in the near term; however, we will continue to work in partnership with Galaxy Digital to offer investors a full range of products with exposure to this transformative asset class, including pursuing a physically-backed digital asset ETF," Invesco declared in a statement.