Former NYSE chairman Tom Farley‘s forecasting anticipate an influx of capital into the cryptocurrency world with the US Securities and Exchange Commission’s (SEC) approval of spot exchange-traded funds (ETFs) on Bitcoin.
Specifically, Farley pointed out that the approval will make it easier to buy because many people believe in Bitcoin, calling it a “great invention.” In addition, he thinks this approval will greatly facilitate access and interest in the cryptocurrency industry. Let’s see all the details below.
ETFs: forecasting on how Bitcoin could drive a new flow of liquidity
As anticipated, former New York Stock Exchange (NYSE) President Tom Farley reviewed the predictions of the approval of Bitcoin spot exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC).
He also talked about the prospects of the upcoming cryptocurrency bull run during an interview with CNBC last week. Farley, who led the NYSE Group from 2014 to 2018, currently serves as CEO at cryptocurrency exchange Bullish.
Farley’s optimism about Bitcoin is rooted in the fact that all U.S. regulators, including the SEC, have declared that BTC is not a security.
Not surprisingly, SEC Chairman Gary Gensler has repeatedly stressed that, in his view, all cryptographic tokens except Bitcoin are considered securities.
The reason for Farley’s enthusiasm is the possibility that an ETF on Bitcoin will be approved quickly, leading to a significant influx of money into the industry.
He also pointed out that the ease of purchase and investor confidence in Bitcoin make the approval of an ETF a positive point for the entire cryptocurrency industry.
Analyzing the current state of the cryptocurrency market, Farley said he believes the bull run has already begun, highlighting the importance for exchanges to be reliable, compliant, and supportive of the digital asset industry.
Bullish, Farley’s cryptocurrency exchange, was launched in 2021 and has gained support from well-known investors, including Peter Thiel, Alan Howard, and Mike Novogratz.
Recently, the exchange acquired Coindesk, a media outlet specializing in cryptocurrencies, in an all-cash deal.
Bitcoin’s recent rise amid optimism for ETFs and some analyst doubts
After a remarkable jump from $26,750 on 12 October to $34,667 on 31 October, the price of Bitcoin (BTC) continued to rise in November.
In fact, the value surpassed $36,500, reaching support at $37,400 when Grayscale Investments confronted the SEC regarding the Bitcoin ETF.
However, volatility has increased this month, with BTC heading toward $38,000 while Bitcoin ETF investors are still holding their breath ahead of possible future SEC approval.
This could suggest growing bear confidence, while bullish investors may be losing momentum as they await SEC approval.
However, Off The Chain Capital President Brian Dixon does not anticipate a big rally immediately after approval of the Bitcoin ETF, saying there could be a short-term rise followed by a decline, but a more significant rise once operational.
This outlook is shared by Peter Schiff of Euro Pacific Capital, who warned that the approval will mark the peak of the rally, predicting a possible sell-off before it goes live.
Mads Eberhardt, an analyst at Steno Research, also criticizes excessive optimism about the Bitcoin ETF, anticipating more selling pressure in the near term. JP Morgan analysts agree, calling BTC’s rally “exaggerated” in a recent note.
Technical analysis shows signs of bearish divergence, with Bitcoin’s RSI marking a divergence from November’s green candles, widening the bearish delta as we approach December.
JPMorgan’s view on the potential impact of Bitcoin ETFs
As anticipated, JPMorgan, a prominent global investment bank, shared a cautionary note regarding the possible approval of Bitcoin Exchange Traded Funds (ETFs) by the U.S. SEC, expressing concerns about the influence it could have on BTC prices.
The bank’s analysts, led by Nikolaos Panigirtzoglou, project possible downward pressure on Bitcoin in the event of a green light for Bitcoin ETFs from the SEC.
Panigirtzoglou laid out his predictions on LinkedIn, highlighting confidence in the SEC’s upcoming approval of spot ETFs on bitcoin.
Panigirtzoglou’s caution focuses mainly on the potential outflow of capital from the Grayscale Bitcoin Trust (GBTC) during the transition into a Bitcoin ETF.
It points out that many speculative investors could capitalize on profits made during the purchase of GBTC shares at significant discounts to the net asset value (NAV) in anticipation of conversion to an ETF.
JPMorgan estimates a possible outflow of about $2.7 billion from GBTC, warning that such a move could put significant downward pressure on Bitcoin prices.
However, Panigirtzoglou indicates that if most of these funds were reinvested in other bitcoin instruments, especially in the planned spot ETFs, the negative impact would likely be smaller.
Nevertheless, the analyst remains cautious, indicating that the balance of risks for Bitcoin prices is tilted to the downside, with some of the funds potentially exiting the Bitcoin space entirely.