The Potential Approval of a Bitcoin ETF: Is it Coming?

Bitcoin's Promising Start to 2024: A Pivotal Moment for ETF Approval and Market Trends

As we embark on this new year, Bitcoin has made a remarkable entry, surpassing a new 365-day high above $45,000, signaling a robust start. The focus now shifts to the eagerly awaited verdict on the pending Bitcoin ETF applications, with a decision expected before January 10th. This decision is anticipated to have significant implications, as the momentum in Bitcoin’s price in recent months has been largely fueled by the expectations surrounding the approval of the first Bitcoin spot ETF. Analysts, including those at Bloomberg, have projected a high likelihood of approval, leading to a surge in buying activity and an optimistic sentiment in the market.

This trend aligns with the classic Wall Street adage, “buy the rumor, sell the news,” where investors anticipate and act on potential news rather than reacting post-announcement. This approach has been a recurring theme in the crypto market, evidenced by the price trajectories during events like the CME Futures and BAKKT launches, and the Coinbase IPO. However, while history has shown a pattern of initial excitement followed by a tempered reaction post-announcement, the current scenario surrounding the ETF decision may deviate from this trend. The growing engagement of the world's largest asset managers, ongoing dialogue with the SEC, amendments to proposals, and positive insider hints all point towards a potentially favorable outcome for the ETF approval. This development, if realized, could mark a significant milestone in the integration of cryptocurrencies into mainstream financial mechanisms and potentially alter the landscape for institutional investments in crypto.

Top stories this week include:

1. Bloomberg Analyst Suggests SEC is Cornered Regarding BTC ETF Approval
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3. Bloomberg analyst James Seyffart asserts that the United States Securities and Exchange Commission is effectively cornered into approving a spot Bitcoin exchange-traded fund (ETF). Seyffart estimates a 90% probability of the ETF getting approved between January 8 and 10. An approval in the near future may lead to an influx of $10 billion into Bitcoin ETFs within the first year. However, he points out that it might take weeks or months for widespread adoption, as institutional investors are expected to perform thorough due diligence before incorporating the cryptocurrency into their portfolios.
4. Starting in 2024, IRS Regulations Mandate Reporting for Crypto Transactions Exceeding $10k
5. Crypto brokers must now report personal details for digital asset transactions over $10,000 to the Internal Revenue Service (IRS). This mandate, included in the infrastructure bill signed by President Joe Biden in 2021, aims to shrink the tax gap in the United States. Brokers are required to furnish the IRS with the sender's name, address, and social security number within 15 days of completing a transaction. After the bill was enacted, several lawmakers proposed further legislation to amend these reporting requirements, arguing that the data demanded from brokers might be challenging or unfeasible to gather.
6. 15 Years of Bitcoin: Celebrating the Anniversary of Satoshi Nakamoto Mining the Genesis Block
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8. On January 3, 2009, the enigmatic Satoshi Nakamoto mined the first Bitcoin block, known as the genesis block. This event marked the beginning of a journey filled with victories against skeptics, including critics, the mainstream media, politicians, and governments globally. As of January 2024, Bitcoin ranks as the 9th most valuable asset globally, judged solely by market capitalization. In celebration of Bitcoin’s 15th anniversary, we offer an overview of the expansive Bitcoin ecosystem.
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11. The Bitcoin Breakdown:
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13. Critical levels for Bitcoin to monitor closely:
14. Supports: $42,600, $41,500, $40,000
15. Resistances: $44,100, $45,600, $47,200
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18. Bitcoin's price is currently navigating a period of uncertainty, particularly due to the pending decision on the spot ETF approval in the United States. Despite this, BTC has maintained a position stronger than earlier in the week. According to TradingView data, as of January 5th, the BTC price is hovering above the $43,000 mark.
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20. If Bitcoin successfully close above its initial resistance level of $44,100 with significant volume, there is potential for an upward trajectory in its price, possibly approaching previous highs near the second resistance level at $45,600.
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22. Conversely, if Bitcoin fails to surpass the $44,100 resistance and forms a shooting star candlestick pattern, it may indicate a downward movement, potentially leading to a retest of the $42,600 support level. It's important to note that the period between January 8th and 10th is expected to introduce considerable volatility in the market. Therefore, traders are advised to employ stop-loss strategies to manage risk effectively during this fluctuating phase.

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