- Experts believed that there was a high chance for a spot Bitcoin ETF approval.
- The market was projected to see increased volatility in the aftermath of the approval.
The crypto market broke out of the low volatility regime in October, with several of the leading assets posting their best performances since May 2022 – the official beginning of the bear market.
The beginning of the bull market?
The market rally pushed the world’s largest crypto asset, Bitcoin’s [BTC], monthly gains to 28.34%, according to a report by digital asset manager Galaxy. Moreover, the industry benchmark Bloomberg Galaxy Crypto Index (BGCI) rose more than 20%.
The leap was primarily built on the optimism over potential approvals of Bitcoin spot ETF applications by the U.S. Securities and Exchange Commission (SEC).
In fact, the drama started when unconfirmed news about the approval of one of the many applications sent BTC soaring to nearly $30,000.
While the news was debunked as expected, the volatility and sudden surge led many experts to view the episode as a “dress rehearsal” before the eventual approval. Since then, BTC has moved further northwards, trading at $36,830 at press time, per CoinMarketCap.
The sentiment has been shaped by positive predictions by experts and entities tracking the digital market. Bloomberg placed the odds of approval at 90% by 10 January, the earliest deadline for the first application.
What Bitcoin spot ETF approval means for the market
The Galaxy report outlined a list of probable scenarios for when the applications will be approved in the future. Taking a cue from history, it was projected that the market would see increased volatility in the aftermath.
Moreover, given the legal relief, the chances of Grayscale Bitcoin Trust (GBTC) turning into a spot ETF was also high. However, the potential conversion could also lead to downward pressure.
This was because existing shareholders would dump their shares and BTC held in custody would be released in the market to get capital.
Additionally, ETH has seen lower growth when compared to Bitcoin, as evident by the low ETH/BTC ratio of 0.052. But things could change drastically, as seasoned investors might start leaning towards ETH after Bitcoin approval.
Read Bitcoin’s [BTC] Price Prediction 2023-24
Though less publicized, ETH was also in the spot ETF race.
Meanwhile, Bitcoin continued to ride on the bullishness. The number of bullish bets on the king coin continued to increase. The Open Interest (OI) also jumped to $7.2 billion, as per on-chain analyst firm Santiment.
🤑 #Bitcoin, now up +37% in 2 months, has seen its ratio of traders opening #bullish positions (vs. #bearish) hitting 3-month highs. Also, the total open interest on exchanges has ballooned to $7.2B. Ideally, $BTC will continue rising after #FOMO settles. https://t.co/YImIUMGRyl pic.twitter.com/4TyZe5YfFz
— Santiment (@santimentfeed) November 8, 2023