After waiting for more than four years, the crypto community is finally going to get the green light to issue Exchange-Traded funds. By the end of October, many expert insiders believe we will have four futures ETFs approved by the United States Securities and Exchange Commission (SEC). Even though it has taken a considerable amount of time compared to counterparts in Canada, the SEC is now allowing all kinds of investors to gain exposure to leading companies in the cryptocurrency industry.
With so much optimism in the market, the price of BTC blew past a crucial resistance level at $55k and reached $1 trillion in market cap for the first time in four months. The bitcoin ETFs will likely pump up the price even more upon approval. What’s more interesting is— the bias problem it solves between spot ETFs and futures ETFs. The increased fees on the spot create more selling pressure, and futures dominate with high price suppression and more volatility.
Hedge funds are likely to sign many new clients with this new approval, and many of them have already agreed on a contract. The only thing left is their signature. The hedge funds could significantly make bank with these ETFs, as they can identify short opportunities while still holding onto the spot. The fess would no longer matter, as they would get more than 10% annualized yield.
Many top investment firms and hedge funds are now considering changing their positions and allocating more bitcoin percentages. Everyone believes now is the time for bitcoin to shine. The actively managed mobile hedge fund, Titan, recently spoke about their plans when bitcoin gets its first ETF approval. They revealed their positions slimmed down for non-crypto-related assets.
The word around the market is that— altcoins have had their run, and it is time for bitcoin to catch up. The research chart shared by Titan indicates a local peak for the Altcoin Season Index.
The growth we have seen in a few altcoins is unfathomable. But in October, that might not be the case. Institutional flows show signs of reversal after suffering one of the long-standing outflow periods. We know the middle part of a bull run is mainly due to retail, and now, it is time for institutions to buy bitcoin at large. We also are aware that once institutional players step in— they will set a high, concrete price floor and do nothing but HODL.
The good news is that BlockFi, a popular crypto platform, filed for bitcoin futures ETF. Like Volt equity ETF, we expect the lending platform to also approve their ETFs. The SEC has BlockFie last on the list, and many analysts feel confident about it.
Recently, Bloomberg reported that four ETFs— ProShares, Valkyrie, VanEck, and Galaxy would likely get ETF approval by the end of October. BlockFi may not get a green light before the four offerings, but it could be the fifth.
If all goes well and ETFs are implemented in the right way, we could see a BTC price target reaching anywhere between $150,000-$250,000. At that time, it would not just be limited to the reach of exchange-traded funds but will open up more opportunities for investors to explore the crypto space.
Even if we look at the broader market without considering the possibility of an ETF, we are still looking pretty solid with all the fundamentals unchanged. Few on-chain metrics that can give us a better picture:
Supply Shock Ratios
This metric shows the extremely bullish nature of bitcoin moving forward. The number of long-term holders showing epic conviction continues to rise to new all-time highs. If this number keeps going higher, we will experience a supply squeeze effect, that could catapult the price to never seen before levels.
Mining Activity
If the miners start selling bitcoin, then it is a very bad sign. But since July, the mining activity has increased tremendously, bringing back all lost hash power. In last few weeks, we also saw miners accumulating again after selling some coins into strength
Closing Thoughts
The bitcoin supercycle might have just begun with this new approval of futures ETFs. The state of the market is in profit right now, and we see now changes to supply dynamics. A minor pullback is possible, but it wouldn’t matter once the institutions get exposure to bitcoin-related companies. In essence, the fourth quarter will be insane, and we will see huge swings in the prices of bitcoin and other cryptocurrencies.
Born and brought up in India, Karthikeya Gutta is a crypto journalist and freelance contributor for ItsBlockchain. He covers various aspects of the industry with in-depth analysis and research. His passion towards blockchain and crypto ecosystem is mainly because he believes it can really change the world and help millions of people.
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