The cryptocurrency market appears to be undervaluing the bullish potential of U.S. spot Bitcoin BTC 0.30% ETFs, according to multiple reports from crypto research firms. Analysts argue that the market is fundamentally underappreciating the positive impact that an approval of a spot Bitcoin ETF could have on the cryptocurrency’s price.
As of September 5, the market sentiment towards Bitcoin and other cryptocurrencies has been cautiously optimistic, yet restrained. Despite the last three months showing significant improvements in the regulatory landscape for cryptocurrencies, this sentiment has not been fully reflected in the price of Bitcoin or other mainstay crypto assets.
Recent legal victories, such as Grayscale’s win against the Securities and Exchange Commission (SEC), led to a brief market surge but were quickly retraced. The SEC has delayed decisions on seven spot Bitcoin ETF proposals from major financial firms like BlackRock, Fidelity, VanEck, WisdomTree, Invesco, Bitwise, and Valkyrie until mid-October. These delays have contributed to the market’s cautious stance.
Crypto research firm K33 Research has been vocal about the market’s undervaluation of the bullish potential of spot Bitcoin ETFs. Senior Analyst Vetle Lunde and Vice President Anders Helseth noted that an approval would attract enormous inflows and significantly increase buying pressure for Bitcoin. They argue that the downside of a potential spot ETF rejection would be negligible and that Bitcoin prices would simply maintain the status quo.
The Nasdaq 100, often considered a barometer of the market’s risk appetite, has climbed by 2% recently,analysts are now predicting a 75% chance of spot Bitcoin ETF approval within the year. These data points suggest that the market’s valuation seems mispriced, according to Lunde and Helseth.
Sentiment in the crypto derivatives market remains negative, with funding rates, CME basis, and next-month premiums consistently below average since mid-August. However, this sentiment could turn in a heartbeat,say analysts. Open interest remains stable, and there are no significant flows into Bitcoin futures ETFs. The options market’s skew, which gauges traders’ bullish or bearish inclinations, is notably volatile.
Ether (ETH), the second-largest cryptocurrency, is also in focus. Analysts suggest that Ether is likely to outperform Bitcoin over the next two months as it will benefit from strong momentum ahead of a futures-based ETF listing. Futures-based Ether ETFs could get a final verdict in mid-October, with the SEC said to be ready to greenlight the proposals.
