The Potential Impact of Spot ETF Launch on Bitcoin: Expert Insights and Market
While most market participants anticipate a rally following the launch of spot ETFs in the United States, some experts have issued a warning about a significant decline in Bitcoin. The analytical agency CryptoQuant notes a high percentage of unrealized profits in the hands of short-term holders, historically preceding a substantial correction.
The approval of ETFs will trigger a "buy the rumor, sell the fact" scenario. The onset of the correction will lead to a cascade of margin position liquidations, further pushing the price downward.
Since the end of October, the funding rate has been deep in the green zone, indicating a significant dominance of bulls in perpetual futures contracts.
According to CryptoQuant's estimate, the ETF launch on January 10th will result in a Bitcoin correction to $32,000 by the end of the month.
A more negative scenario for Bitcoin has been outlined by BitMEX co-founder Arthur Hayes. In his opinion, if exchange-traded funds (ETFs) see significant success, they will ultimately own all the coins, and investors will merely shift money from one account to another. This could kill Bitcoin as transactions dry up, and miners cease to support the network.
However, both CryptoQuant and Ark Invest, despite the potential sell-off in January, maintain a bullish outlook on long-term prospects. According to the latter's forecast, by 2030, Bitcoin could be valued between $260,000 and $1.5 million.
For Bitcoin, which showed extremely low relative drawdown figures in 2023, a possible 25% correction in January would not be extraordinary. But even that is unlikely due to the significant influx of investments expected with the ETF launch. Nevertheless, the market's low depth, persisting since the FTX crash, is anticipated to result in considerable volatility.
Which of these predictions will come true? We will summarise the results in exactly one year!
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