The cryptocurrency market has vastly underestimated the potential of the approval of a spot bitcoin (BTC) exchange-traded fund (ETF) to drive prices higher, according to analysts at cryptocurrency research firm K33 (formerly Arcane Research).
In a Sept. 5 market report, K33 senior analyst Vetle Lunde and vice president Anders Helseth said the past three months had greatly improved the chances of a spot bitcoin ETF being approved, although this sentiment was not reflected in bitcoin or Prices of other mainstream encrypted assets.
While Bitcoin all but gave up gains following Grayscale’s legal victory over the SEC, the approval would “attract massive inflows” and significantly increase buying pressure on Bitcoin, the analyst explained.
However, they wrote that the negative impact of a potential ETF spot rejection is “negligible” and bitcoin prices will remain at normal levels.
Lunde and Helseth add that the market is fundamentally wrong about the ETF outlook, given the increasing likelihood of spot ETF approval (several Bloomberg analysts are now predicting a 75% chance of approval within the year).
“I firmly believe that the market is wrong. By all accounts, this is a buyer’s market, and it is reckless not to actively accumulate bitcoin at current levels.”
To support their bullish forecasts, analysts focused on the recent 2% gain in the tech-heavy Nasdaq 100 , which is often seen as an indicator of risk appetite in the broader market.
ETH will outperform BTC
Additionally, Lunde and Helserth also expressed their optimism on the price of Ethereum (ETH), explaining that Ethereum could outperform Bitcoin over the next two months as it will benefit from a futures-based ETF Strong momentum ahead of listing.
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They explained that ether could follow a similar path to bitcoin, which rallied about 60% in the weeks leading up to the launch of the first bitcoin futures-based ETF on Oct. 19, 2021.
A ruling on the futures-based ether ETF is expected in mid-October and will reportedly be approved by the SEC.
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