Top Coinbase Researcher Believes Bitcoin ETF Approval Odds Are 'Partially Priced In

Top Coinbase Researcher Believes Bitcoin ETF Approval Odds Are 'Partially Priced In'

In a recent analysis, David Duong, the Head of Institutional Research at a leading crypto exchange, suggests that the performance disparity between Bitcoin and the altcoin market hints at market participants' anticipation of Bitcoin ETF approval.

Duong points out that the excitement surrounding a Bitcoin spot ETF approval might not result in the dramatic rally some traders expect, as the event appears to be partially priced into Bitcoin's value.

He explains, "This raises questions about the extent to which Bitcoin can outperform if the U.S. Securities and Exchange Commission (SEC) delivers a favorable decision."

Duong further notes that even if a BTC ETF is approved, it might take time for significant inflows to materialize. Drawing a comparison to the approval of a previous gold ETF, he remarks, "For instance, when the SPDR Gold Shares ETF (GLD) launched almost 19 years ago, it attracted only $1.9 billion in net inflows (inflation-adjusted) within the first 30 days and grew to $4.8 billion within its first year."

The SEC recently postponed decisions on several spot BTC ETF applications, including one from BlackRock. However, the final deadline for the SEC to review one such application, the ARK 21 Shares Bitcoin ETF, is set for January 10th.

Duong says that the ARK 21 Shares Bitcoin ETF deadline could encourage the SEC to issue decisions on a number of applications this year.

“We believe that barring a US government shutdown, it’s entirely possible that we may see the SEC make a decision before the end of 4Q23. Otherwise, that puts the SEC in the awkward position of possibly deferring its decision on a subset of filings on January 3, 2024, right after the holidays, only to address a final deadline decision for one ETF filing days later on January 10. To avoid sending mixed messages, we think the SEC could decide to collectively address these applications in December 2023.”

Oct 15, 2023