A whirlwind of speculation and conflicting information surrounded the potential approval of a spot Bitcoin (CRYPTO: BTC) ETF this week, ultimately culminating in a muted market reaction that has analysts questioning the potential impact of this long-awaited regulatory milestone.
The drama reached its preliminary peak with a hacked tweet from the SEC's official Twitter account falsely announcing the approval of all Bitcoin spot ETFs on Jan. 9.

As many had predicted, Bitcoin jumped to $48,000 on the news.

However, the euphoria was short-lived, as the SEC quickly clarified that the account had been compromised and no such approval had been granted.

Bitcoin promptly tumbled back to $45,000.

QCP Capital noted how this tepid response signals that an actual approval may already be factored into the market, suggesting a limited impact on future price movements.

"We take this as a warning sign that an approval is mostly priced in and there may not be a huge rally post the approval," the analysts wrote.

Moreover, QCP Capital's analysis suggests a possible change in Ethereum's (CRYPTO: ETH) standing compared to Bitcoin, as reflected in the ETH-BTC exchange rate's movement following the fake SEC announcement.

They also highlighted the elevated options volatility due to the ETF news, expecting a normalization post-approval.

Aurelie Barthere, Nansen’s Principal Research Analyst, discussed the implications of a Bitcoin spot ETF approval on market dynamics.

Barthere predicts a decrease in the influence of crypto whales and a reduction in spot market volatility as institutional investors enter the fray.

Furthermore, Barthere emphasizes that the approval would test institutional investors' appetite for Bitcoin, potentially overcoming hurdles related to custody and regulatory uncertainty.

Also Read: EXCLUSIVE: Bitcoin ETFs On The Horizon – It's 'The Most Important Thing,' Says Bitwise CIO

K33 Research focused on the impact of a Bitcoin spot ETF approval on the futures market.

They expect significant selling pressure on CME Bitcoin futures as investors move funds to potentially cheaper spot ETFs.

This shift could decrease open interest and premiums in the futures market, as active participants may seek to realize profits post-ETF approval.

While the SEC's decision on Bitcoin ETFs is highly anticipated, market analysts suggest that its approval might not trigger a significant rally in Bitcoin prices.

Instead, it could lead to a reshuffling of market dynamics, impacting both spot and futures markets, and potentially reducing the volatility and influence of large-scale investors in the cryptocurrency space.

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