As Bitcoin (BTC) continues its quiet dance around the $29,000 mark, the market is watching closely for the highly anticipated catalyst that could propel it to all-time highs: exchange-traded funds (ETFs). With 30-day volatility falling to new lows and trading volumes appearing to be on hold, the catalyst we’ve been waiting for could very well be around the corner.
Bitcoin’s steady performance has created a semblance of stability, driving options’ implied volatility metrics lower. At the same time, a stable market spurred an upward trend in perpetual open interest. Against this backdrop, leverage built, signaling a potential increase in in-store volatility.
Big Bitcoin Catalyst
Catherine Wood, CEO of ARK Invest, said, “I think the SEC, if it has to approve one Bitcoin ETF, will approve more than one at a time.” And it seems imminent with the next ETF decisions.
The U.S. Securities and Exchange Commission (SEC) is facing an impending decision on ARK’s 21Shares ETF filing. Previous events have shown the huge influence of ETF momentum in the market, most notably during the June rally after the ETF was filed by BlackRock.
At this point, theories about whether the SEC will approve, reject, or simply delay its decision are just speculation. The application of ARK will most likely have an impact on market volatility. However, current indicators suggest a postponement, as the SEC’s attention remains divided, with its eyes also on the grayscale lawsuit.
Historically, the SEC has looked at using the entire length of its 240-day decision window. With ARK’s 21Shares filing verdict set to be released between August 11-13, a potential spike in market activity and volatility is to be expected.
And ARK isn’t the only player in this game. The horizon is full of additional ETF deadlines, with Bitwise’s decision slated for September 1 and subsequent decisions following closely on September 2. The market, already in a state of heightened anticipation, could see increased volume and price swings due to these impending verdicts.
BTC waits in limbo
However, it’s not just ETFs that people are interested in. Bitcoin’s current stability, reflecting its behavior since the summer of 2020 and the incoming halving, provides a perfect environment for accumulation. This calm, however, has its own risks. As leverage increases, the risk of potential market sell-offs also increases.
For traders and investors, it’s a waiting game. BTC experiences bursts of volatility and sporadic, short-lived market volumes. Despite this, BTC remains in a tight consolidation phase around the $29,000 mark.
Concluding with insights from industry expert, David Rubenstein, co-founder and co-CEO of Carlyle Group, noted,
“Well, what happened is people laugh at bitcoin and other cryptocurrencies, but now Larry Fink’s establishment at BlackRock is saying they’re going to get an ETF approved by the So you say wait a second the mighty BlackRock is ready to have a bitcoin ETF maybe bitcoin is going to be around for a while.
Bitcoin and the entire crypto industry still have an uphill battle ahead of them, but the SEC’s decision on ETFs and global regulation will be the biggest influence.
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