Investors Take Caution Amid Leverage Purge and Delayed Spot Bitcoin ETF Prospects: Expert
Investors have grown more cautious ahead of the US Securities and Exchange Commission’s upcoming decision on the approval of an exchange-traded fund (ETF) linked directly to Bitcoin (BTC).
According to Jacob Joseph, a research analyst at CCData, the recent leverage purge and the increasing likelihood of a delayed approval have influenced the mindset of investors and traders, prompting a more cautious approach.
“The purge of leverage and the growing possibility of a delayed approval, which has now influenced the mindset of some investors and traders, have led to a more cautious approach,” he said.
Joseph added that the cautious sentiment has contributed to the subdued price action witnessed in the last 24 hours.
He noted that while it still appears probable that a spot Bitcoin ETF will receive approval in the coming days, any unexpected delay contrary to market expectations could lead to a more significant downturn for digital assets.
“While it still seems likely that a spot Bitcoin ETF will be approved in the coming days, any delay contrary to the market consensus is likely to result in a larger drawdown for digital assets.”
Major asset managers, including BlackRock Inc. and Fidelity, have filed applications for ETFs tied to the digital asset, and the SEC has until January 10 to approve or reject these applications.
Bloomberg Intelligence analysts predict that a decision could be announced as early as January 8, with a 90% chance of approval for all applications.
On Wednesday, Bitcoin crashed to as low as $40,000 after a report from Matrixport claimed the SEC is poised to reject spot Bitcoin ETF applications this month.
“Matrix on Target projects a January rejection for Bitcoin Spot ETFs by the SEC,
Read more on cryptonews.com
