The early approval of a spot bitcoin exchange-traded fund (ETF) has dominated discussions among traders, analysts and market observers in recent days. While many speculate about the potential impact, the old “buy the rumor, sell the news” strategy has been at the forefront of many conversations. Will the strategy drive down the price of bitcoin once BlackRock, Fidelity, Invesco, Bitwise and other financial giants list their spot ETFs on the market?
bitcoin ETF Spot Approval: A ‘Selling the News’ Event?
Notorious financial expert and bitcoin skeptic Peter Schiff has questioned the long-standing enthusiasm surrounding the prospects of ETFs, suggesting that their approval could mark a peak in optimism. He tweeted, “How many times can bitcoin recover from the same ETF rumor? Once a US bitcoin ETF is approved, or GBTC can become an ETF, there will be no more “good” news for bitcoin to rally. After years of believing the rumor, everyone will finally be able to sell the news.”
However, the comparison with the world of traditional finance, particularly gold, challenges Schiff’s views. Cozy The Caller, a prominent crypto analyst, replied: “Gold continued to rise after its ETF approval. You are always contradicting yourself, Peter.”
This sentiment is echoed by Charles Edwards, founder of Capriole Investments, who recently pointed out the historical parallels between btc today and gold in 2004.
Edwards highlighted:
What is the asset most similar to bitcoin? Gold. What happened when the Gold ETF was launched? In November 2004, gold was in a bear market, down -50% (just like bitcoin today). When ETF approval came, what followed was a massive +350% return and a seven-year bull run.
Notably, after the debut of the first gold ETF, gold rose more than 8% in the following five weeks. This was followed by a small pullback of around -10% in the following weeks. However, after this drop, gold experienced a monumental rally, as Edwards describes.
The btc community is divided
The bitcoin community is notably divided over how the spot approval of the ETF will influence the price of btc. crypto chase believe a move towards around $30,000 may indicate a preemptive rally ahead of ETF approval. He said: “If btc moves to the mid-30K, we will officially bring forward the ETF approval and I wouldn’t be surprised if it becomes a news sell-off event.”
However, Bit Paine, another highly regarded bitcoin analyst, emphasized the transformative nature of the approval of an ETF, suggesting that critics underestimate the magnitude of new capital that will flow into btc.
He emphasized: “If you think the approval of the ETF (which will begin trading within DAYS) is a news selling event, you simply have no idea the size of the equity fund that is about to gain btc spot access. in relation to the amount of spot btc available for sale.”
Additionally, Robert L. Peters highlighted other bullish factors for bitcoin, including the upcoming halving, possible interventions by central banks around the world, and a looming global crisis. When asked who could sell amid these bullish indicators, Bit Paine responded tersely: “Idiots.”
Reinforcing the bullish sentiment, Quinten François, co-founder and chief brand officer of WhereAt Social, shared images suggesting that the ETF is just one of multiple factors that will likely drive the price of bitcoin higher.
Your stance on those who see the ETF as a potential news-selling event? “If you think ETF approval will be a ‘selling the news’ event, you’re ngmi (you’re not going to make it).”
The picture he presented indicates that the ETF is not the only positive driver for bitcoin. Specifically, the halving planned for April next year is projected to raise the price of btc, in line with previous halving cycles.
If you think the ETF approval will be an event to “sell the news”, you are wrong.bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>#bitcoin crypto?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>#crypto pic.twitter.com/ZPVwh4ZrU5
—Quinten | 048.eth (@QuintenFrancois) October 24, 2023
In summary, while there are varying opinions on the potential impact of the approval of a spot ETF, the majority of the community remains optimistic and sees it as an additional catalyst in a series of events that will drive the price of btc upwards. Only time will tell if the approval will truly be a “news selling” event or will pave the way for further price escalation.
At the time of publication, btc was trading at $34,612.
Featured image from Shutterstock, chart from TradingView.com
