More than 220 million dollars evaporated

Speculation regarding the approval of a Bitcoin ETF spread like wildfire, triggering a market movement that pushed the price of crypto to 30 thousand dollars within an hour. However, official confirmations from both the SEC and Nasdaq debunked the claims. And the gains, which reached 10 percent in an instant, were liquidated with almost similar speed.

It is not surprising that the bulls were so excited; the approval of a Bitcoin spot ETF by the SEC could significantly accelerate the mainstream adoption of Bitcoin investment and increase its accessibility to a broader investor base. Although its status is still pending, BlackRock's decision to file for a Bitcoin spot ETF marks a critical turning point in the development of the cryptocurrency market.

However, last week, the now-deleted X post that caused the fluctuation came from the cryptocurrency news site Cointelegraph. It stated that BlackRock had received SEC approval for a pioneering Bitcoin spot ETF. This post may have been a small pump, but the price of the volatility it created in the Bitcoin market, which is fueled by massive leverage, was heavy.

Kripto Teknik founder Altuğ İşler believes that this post, which carried suspicions of being a clear manipulation, also brought an important clue with it; “With this one-hour fluctuation, many investors trading futures were victimized. More than 220 million dollars evaporated in an instant. However, this event also showed us how investors will act when the correct news arrives. Although there is currently relatively limited depth, we now know that most of the existing players are waiting for this news and will take action. Bitcoin is currently standing on a kind of launch pad. Assuming that the SEC usually waits until the last day for such decisions, we had set our clocks for February of next year.”

ETF OVERTIME AT COMPANIES

Gate Turkey Research Manager Sevcan Dedeoğlu said; “The company that receives the first approval will gain a significant advantage as it will capture a large portion of the demand in the market. That is why we see that companies that have applied for a Bitcoin ETF are also making some changes to their applications. A smooth operational process is being managed to obtain approval. Although the SEC has not yet approved the Bitcoin Spot ETF, it published an email for ETF issuers in recent weeks, stating that attention should be paid to custody arrangements, pricing and accounting standards compliance, risk management disclosures regarding uncertainty, and mining energy consumption characteristics. For this reason, we see a race and intense overtime among the companies that have applied.”

“IT IS CONSIDERED A DONE DEAL”

Cryptocurrency Expert Ozan Kara said that the SEC, which is the target of criticism for acting “arbitrarily and capriciously,” is considered a certainty to approve the ETF applications, and made the following assessment; “The market currently views the spot Bitcoin ETF as a “done deal.” The SEC is playing for time and seems determined to use the time allotted to it to the fullest. Finally, Galaxy Digital CEO Novogratz said that the SEC would not appeal the court decision and that the Bitcoin spot ETF application would be approved in 2023. On the investor side, we can track that the Bitcoin spot ETF will be approved from the negative premium of Grayscale's Bitcoin ETF. While the difference between the amount of Bitcoin held by Grayscale and the market value of the fund was 44 percent in June 2023, it has now fallen to 13 percent. Because if the spot ETF is approved, the fund will be open to arbitrage and this negative premium will disappear. Investors who could buy GBTC had the chance to earn returns without taking Bitcoin risk by opening long positions here and short positions on exchanges. After the spot ETF approval, they will be able to realize their premiums here.”

HOW DO GEOPOLITICAL RISKS AFFECT THE CRYPTOCURRENCY MARKET

Sevcan Dedeoğlu: Last week, US indices and the price of gold moved negatively and positively according to the perception of geopolitical risk. We saw selling when the possibility of conflict increased, and buying movements when diplomatic channels opened. The cryptocurrency market, on the other hand, remained insensitive to geopolitical risks and did not price in this news. It also maintained its price at the 26-27 thousand dollar level. With the baseless news that the Bitcoin Spot ETF had been approved coming to the fore, Bitcoin rose above the 30 thousand dollar level. This shows us that despite difficult market conditions, the cryptocurrency market can positively price in positive news about itself. This makes it strong. However, we did not see Bitcoin priced like a safe haven in this risk environment. There was upward movement in the price of gold, but Bitcoin lagged behind this movement. If selling pressure dominates global markets while Bitcoin rises with positive news, it may attract the attention of investors.

Ozan Kara: With the monetary expansion after COVID, the value of Bitcoin increased exponentially. Performing better than gold, Bitcoin passed its first test with a passing grade. In the process of entering the monetary expansion process with the support packages that came after the collapse of the markets with COVID in March 2020, Bitcoin increased by 428 percent, while gold was limited to a 32 percent increase. Although this situation is understandable according to the market volume of gold, it cannot be said that BTC performed poorly. If Bitcoin is digital gold, it can be expected that the price of BTC will increase just as the preference for gold increases during periods when wars and geopolitical risks increase. Although this situation has never been experienced for Bitcoin, it seems like it will take its second test now. On the other hand, cryptocurrencies are, in my eyes, ventures and companies. Therefore, it is likely that other coins, except BTC, will perform poorly. As we will see in the declines in the equity market with the lack of risk appetite, we may see declines in altcoins. I think Bitcoin will decouple positively from this situation. In the Israel-Palestine tension experienced in recent days, gold has started its upward movement with the increase in risks. I am also waiting with curiosity to see how Bitcoin will perform during this period.

Altuğ İşler: It is not easy to predict which event Bitcoin will react to, when, and how. We have seen that there is a collapse in Bitcoin when there is a negative situation that will affect the whole world, which we call a Black Swan. For example, Bitcoin experienced a serious decline during the COVID crisis. However, when it comes to wars (I am not talking about something large-scale), for example, in the Russia-Ukraine war, Bitcoin did not overreact. Therefore, we will see by living through it; it is a situation with too many variables. Of course, if a serious collapse begins in global markets, it is impossible for Bitcoin not to be affected by this.

News Source: 12punto