The cryptocurrency world has been abuzz with discussions surrounding the potential approval of Bitcoin BTC -2.09% Exchange-Traded Funds (ETFs). As hopes rise, so do concerns about the possible repercussions of such a move.
Bitcoin’s price recently crossed the $29,500 mark, marking an over 11% increase in its weekly gains. This surge is attributed to the growing optimism around the possible approval of a spot bitcoin ETF in the U.S. Such bullish sentiment is not without its detractors, with some fearing that a spot bitcoin ETF could introduce vulnerabilities similar to those seen in the gold and silver markets.
Critics argue that the approval of such an ETF might pave the way for manipulative practices reminiscent of those alleged in precious metals. The gold and silver markets have long been subjects of speculation and accusations of price manipulation, with ETFs and financial giants often at the center of these allegations.
Similar concerns are now being echoed in the context of Bitcoin ETFs, with fears that unchecked bills might mask as much as 100,000 BTC. Such ETFs could potentially exploit virtual supplies, aiding corporations in hedging massive derivative bets. When prices soar, this illusory supply might be released to suppress the price surge. Gold, for instance, has reportedly fallen victim to such practices in the past.
In recent developments, several ETF providers have amended their filings, pressuring the U.S. Securities and Exchange Commission (SEC) to reconsider its stance on a bitcoin ETF approval. Earlier in the week, four members of the House Financial Services Committee penned a letter to SEC Chair Gary Gensler, urging the regulatory body to heed court decisions and abandon efforts to block bitcoin ETFs.
The Grayscale Bitcoin Trust (GBTC), one of the largest institutional bitcoin holdings, has also been in the spotlight. There’s speculation about GBTC being converted into an ETF, a move that has excited many traders.
Grayscale is among several asset managers, including heavyweights like BlackRock, Fidelity, and WisdomTree, vying for a bitcoin spot ETF. A ruling in Grayscale’s favor could potentially shift market sentiment to the bullish side, laying the foundation for a broader market ascent.
Lucy Hu, a senior trader at Metalpha, shared her insights, stating, “Bitcoin has been buoyed by potential ETF approval and a rising number of ETF submissions by leading companies.”
She added that as the deadline for BTC spot ETF applications from institutions such as Blackrock approaches, market confidence in ETF approval has surged.
However, not everyone is on board with the optimism. Josef TÄ›tek, a BTC analyst from Trezor, recently remarked that ETFs could be a “legalization of Bitcoin” but not necessarily in a positive light. He believes that in the long run, ETFs might not benefit BTC and even went on to say that a Bitcoin ETF could be “one of the worst things that could happen in the Bitcoin adoption process.”