Despite optimistic market expectations for the approval of the first Bitcoin spot ETF in the United States before January 10th, a recent survey conducted by cryptocurrency index fund management companies Bitwise and VettaFi revealed that only 39% believe that a Bitcoin spot ETF will be approved in 2024. As the approval process reaches a critical moment, Bitcoin is expected to experience even greater volatility.
Bitwise Asset Management and VettaFi released their sixth annual “Bitwise/VettaFi 2024 Financial Advisor Attitudes Benchmark Survey” report on January 5th. The survey was conducted from October 20th to December 18th and collected responses from 437 financial advisors.
The report found that only 39% of advisors believe that a Bitcoin spot ETF will be approved in 2024. However, Bloomberg ETF analysts believe that there is a 90% chance of a Bitcoin spot ETF being approved in January this year.
The majority of respondents believe that the approval of a Bitcoin spot ETF is an important catalyst, with 88% of advisors intending to buy Bitcoin once a spot ETF is approved. Additionally, only 19% of advisors indicated that they are able to buy cryptocurrencies in client accounts due to restrictions.
Other key findings from the survey include:
– 98% of advisors who currently allocate cryptocurrencies in client accounts plan to maintain or increase their investments in 2024.
– 59% of advisors stated that their “some” or “all” clients invest in cryptocurrencies independently, outside of advisory relationships.
– 64% of advisors believe that regulatory uncertainty is the main obstacle to wider adoption of cryptocurrencies in investment portfolios, while 47% consider volatility as a secondary urgent issue.
– Compared to Ethereum, 71% of advisors prefer Bitcoin, a significant increase from the previous year’s 53%.
The approval of a Bitcoin spot ETF by the U.S. Securities and Exchange Commission (SEC) is currently influencing the direction of the Bitcoin market. A research report released by Matrixport warned that since the SEC’s requirements for a Bitcoin spot ETF have not been fully met, the SEC is unlikely to approve any Bitcoin spot ETF applications in January. As a result, Bitcoin experienced a sharp drop of over $4,000 within an hour on the evening of January 3rd, plunging from around $45,000 to $40,750 and causing many to suffer liquidation.
However, according to a report from Fox Business citing insiders, the SEC may approve an ETF as early as this Friday. Following the official start of trading next week, the Bitcoin price quickly rebounded, reaching $45,000 this morning before experiencing a slight decline to $43,484 at the time of writing, representing a 1.3% increase in the past 24 hours.
Bitfinex analysts pointed out that derivative traders currently anticipate an “unprecedented” level of volatility in the Bitcoin market. Signals from the options market indicate that the current volatility expectations of derivative traders are higher than the average volatility level for the entire year of 2023. The implied volatility of Bitcoin has surged to a multi-month high of 70.1%, exceeding the historical average volatility of 41.1%. Bitfinex analysts cautioned investors to pay attention to the spike in short-term implied volatility as the SEC is about to make a decision, indicating the need to be prepared for greater volatility.
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