Speculation is stirring within the cryptocurrency community regarding the anticipated decision on the Bitcoin exchange-traded fund (ETF) this week. ARK 21Shares awaits a decision on Wednesday, intensifying discussions about the potential impacts of both approval and denial on Bitcoin’s price.
Predictions vary, with expectations of a price increase upon approval, potential declines for both approval and denial. However, one analyst questioning the rationale behind people “shorting” Bitcoin before the decision.
Debate Ignites Over Bitcoin ETF Approval
On X (formerly Twitter), crypto commentators are debating over the potential impact on Bitcoin’s price following the anticipated decision from the United States Securities and Exchange Commission (SEC).
The SEC is set to provide a decision to ARK 21Shares regarding its spot Bitcoin ETF application on January 10. The deadline for other asset managers follows shortly after.
Alex Becker explains to his 922,000 followers on X that the reason that approval of a Bitcoin ETF will not lead to a “Sell the news” event.
He explains that if anything, it is just opening up the asset to a lot more wealthy individuals. Furthermore, these individuals may have never invested in crypto otherwise. This is due to its untraditional ways of doing it, like on an exchange, as opposed to the stock exchange:
“It allows the biggest money holders in the world to actively invest in a way that is comfortable n easy for them.”
At the time of publication, Bitcoin’s price stands at $44,239.
Meanwhile, engineering lead at Swan Bitcoin, Dan Webb, points out that even if the price does decline if the ETF is approved, the downside will not be as extreme as the potential upside, in the event of positive news.
“What is the risk reward of being short Bitcoin going into this week? Even if the ETF gets approved and it’s a “sell the news” event, what’s the potential upside for shorts? 5-10% (assuming no leverage)?”
Mati Greenspan, the Founder and CEO of Quantum Economics, told BeInCrypto earlier this month he believes SEC Chair Gary Gensler is unlikely to want to disappoint his allies by approving an ETF:
““I doubt very much that Gary Gensler is going to approve any kind of crypto-related ETF. I think if its within his power, he’s going to do anything he can to delay the crypto innovation in obséquio of the big bankers that is beholden to.”
Read more: Who Owns the Most Bitcoin in 2024?