Bitcoin ( BitcoinTC), saw some calm as the market digested the approval of the first exchange-traded funds in the United States (ETFs).
Non-futures ETF approvals deemed untrustworthy because of lack of faith
Data from Cointelegraph Markets Pro, TradingView indicated that BTC/USD was at $61,500 Saturday. This is still up by 4% over 24 hours.
After the Wall Street opening on Friday, the pair was at $62,940. The news broke that regulators had approved two ETF application after years of unsuccessful applications.
These ETFs will use CME Bitcoin futures rather than Bitcoin as their underlying asset. The Securities and Exchange Commission (SEC), is set to start deciding the fates of "physical" ETFs in the next month.
Futures-based ETFs received mixed reviews. Opinions on market impact and overall effect of ETFs on Bitcoin price action are varied.
QCP Capital, a crypto trading firm, stated that "we are not certain if these futures based ETFs can draw enough money to trigger an exponential movement higher like the one seen in Q4 2020."
We expect an inflow of investors who switch from Gold ETFs to BTC. The market capitalization of BTC is over $1.1 trillion, though, as it has a high level of 60k. It will take a lot of effort to move the needle.
QCP noted that futures ETFs are designed to appeal more to retail investors than institutional investors. The majority of capital inflows into Bitcoin will therefore be reserved for physical products.
These may not be possible for some time as investors continue to invest in existing Canadian and European Bitcoin ETFs rather than waiting for the SEC or its new Chair Gary Gensler to change their mind.
QCP stated that they suspect that Gensler, the SEC Chair, indirectly eliminated a physical BTC ETF from the US in the foreseeable future. Investors who have access to these markets overseas may have chosen to invest there instead of in futures ETFs in America.
Bulls remain strong despite ETFs that are "priced in".
Cointelegraph reported that the outlook for 2021 is still positive. Bitcoin is expected to rise to $300,000.