Analysts at crypto research firm K33 – formerly Arcane Research – claim that the potential of a spot approval of a Bitcoin (BTC) exchange-traded fund (ETF) to drive up prices is being dramatically underestimated by the crypto market.
In a market report on September 5, Vetle Lunde, senior analyst at K33, and Anders Helseth, vice president of K33, said the past three months have significantly improved the chances of spot Bitcoin ETF approval, although sentiment has not improved reflected in the price of Bitcoin or other major crypto assets.
The analysts said that while Bitcoin has all but given up its gains in the wake of Grayscale’s legal victory over the Securities and Exchange Commission, approval would “attract huge inflows” and significantly increase buying pressure for Bitcoin.
Bitcoin bounced back after Grayscale’s victory. Source: K33 Research
However, the downside of a possible rejection of spot ETFs would be “negligible” and Bitcoin prices would simply carry on as usual, they wrote.
Lunde and Helseth added that given the increased likelihood of spot ETF approvals – several Bloomberg analysts now predict a 75% chance of approval within the year – the market’s outlook for ETFs is fundamentally flawed.
“I firmly believe the market is wrong. This appears to be a buyer’s market and it is reckless not to aggressively accumulate BTC at current levels.”
Analysts based their bullish forecast on the recent 2% rise in the tech-heavy Nasdaq 100 index, often seen as an indicator of the broader market’s appetite for risk.
ETH will outperform BTC
Additionally, Lunde and Helserth expressed optimism about the price of Ether (ETH), stating that ETH is likely to outperform Bitcoin in the next two months as it benefits from strong momentum ahead of a futures-based ETF listing.
Related: BTC bull market started in March, more will be realized in a year – Arthur Hayes
They explained that Ether could follow a similar path to Bitcoin, which gained about 60% in the weeks leading up to the launch of the first Bitcoin futures-based ETF on October 19, 2021.
The ruling on a futures-based Ether ETF is expected to be made in mid-October and is said to have received the green light from the SEC.
Magazine: How to Protect Your Crypto in a Volatile Market – Bitcoin OGs and Experts Speak Out