Bitcoin ETF Check, What’s Next For BTC

Reynaldo Marquez

1 year ago

3 mins read

Picture of a bitcoin with a green upward chart behind it

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The approval of a Bitcoin Exchange Traded Fund (ETF) in the U.S. has come true. Different actors in the crypto space have tried to receive the greenlight from that country’s regulator (SEC) for little less than a decade.

Major achievement for the crypto industry, there is a sensation of euphoria in the market with Bitcoin reaching a 24-hour high of around $63,000. There has been some retracement since that peak, but BTC’s price continues to trade north of $61,000, at the time of writing.

Bitcoin BTC BTCUSD — BTC with minor losses in the daily chart. Source: BTCUSD Tradingview

Investment firm QCP Capital commented on the BTC ETF approval. As reported by NewsBTC, the investment products will track the Chicago Mercantile Exchange (CME) Bitcoin futures. Thus, some have argued that it’ll be a poorly execute product to benefit Wall Street and institutions. QCP Capital said:

The approval of a Bitcoin ETF is a positive development. Whatever the case may be, a progressive step from the regulator is good for Bitcoin and the cryptocurrency market at large.

Opposite to the opinion of those against the Bitcoin ETF approval, QCP Capital believes this product will “sideline institutional” investors due to its characteristics. Thus, the U.S. retail sector could become the predominant player.

A BTC ETF based on CME futures will most likely trade at a premium related to Bitcoin’s spot price. Therefore, institutional investors could have little incentive to trade this investment product in step of simply buying CME contracts. QCP Capital said:

We are not sure if these futures-based ETFs will be able to draw enough new money to trigger an exponential move higher like the one we saw in Q4 2020.

The market could experience a new inflow of capital, as expected from traders and operators, as investors move “out of Gold ETFs into Bitcoin”. It remains to be seen if this move will be able to sustain a rally.

After The Bitcoin ETF, Is Ethereum Next In Line?

In addition to the potential lack of sufficient flows to hold BTC’s current levels, operators seem to have price in the Bitcoin ETF approval, QCP Capital added. There have been rumors going around for the past two weeks with the SEC Chair himself Gary Gensler hinting at this positive possibility.

This could contribute with a potential retracement and trigger a “buy the rumor, sell the news event”. In the future, QCP Capital expects an Ethereum ETF with similar characteristics to be approved as the CME offers ETH based products. The firm said:

(…) this also means that until other coins have a futures contract, the US will only be limited to Bitcoin and Ethereum ETFs for the time being.

Other variables might come in to play to change market dynamics: a growth in CME BTC futures trading volume, a focus on other crypto related issues, the firm said, the increase in Bitcoin based instruments to generate yield.

However, one of the most important variables might be the potential decline in the Grayscale Bitcoin Trust (GBTC). A favorite tool amongst institutions to gain BTC exposure, an ETF could render it obsolete. Thus, the crypto market could face some uncertainty.

As seen below, the GBTC has been trading at an important discount since March 2021. QCP Capital added the following:

What could happen for GBTC in the future is a possible takeover and delisting. We are not sure what market impact this might have but it would be worth keeping an eye on what happens with the largest private Bitcoins treasury with 680,000 BTC.

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

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