2024’s First Major Financial Shift: Spotlight on Bitcoin ETFs
A Wild 2024 Begins: The Good, The Bad and The Ugly.
On Wednesday, the financial world witnessed a significant shift as the SEC approved 11 spot Bitcoin ETFs. The greenlighted funds hail from notable firms like Bitwise, Grayscale, Hashdex, BlackRock, Valkyrie, BZX, Invesco, VanEck, WisdomTree, Fidelity, and Franklin Templeton.
The Good
U.S. investment app Robinhood immediately embraced this development, integrating all 11 ETFs into both retirement and brokerage accounts. Johann Kerbrat, Robinhood Crypto’s general manager, heralded this as a forward leap for crypto’s future in finance. Vlad Tenev, Robinhood’s CEO, echoed this sentiment, considering the SEC’s decision a key element for enhanced risk management in crypto investments.
The approval, however, wasn’t unanimous within the SEC. While Chair Gary Gensler (a Democrat) aligned with the Republican commissioners in favor of the ETF approval, two Democrat commissioners opposed. Notably, despite previous criticisms for his anti-crypto stance, Gensler’s approval was seen by Ark Invest CEO Cathie Wood as a green light for institutional investors.
The other two Republican Commissioners, Mark Uyeda and Hester Peirce celebrated the decision. The latter, who is a long-time supporter of Bitcoin ETFs, deemed the event to be the end of an “unnecessary, but consequential, saga.”
The Bad
On the other side of the spectrum, Commissioner Caroline Crenshaw criticized the move as “unsound” and “ahistorical,” calling ETF approval “tomorrow’s failure”. She further added: “I am concerned about what comes next — when new, potentially more speculative products bearing greater risks of investor harm seek to list, we will hear a chorus of well-heeled voices saying that the SEC’s hands are tied by the new standards that we have set.”
Echoing her concerns, Commissioner Jaime Lizarraga and Senator Elizabeth Warren also expressed disapproval. The Senator’s opinion couldn’t be clearer: “There’s no doubt that the SEC made the wrong decision here.”
The Ugly – BTC/USD Chart Action
Bitcoin ETFs and their approval made the headlines for several months but now that the story has reached its conclusion, Bitcoin seems uncertain of the next move. The recent events pushed BTC/USD to a high of $49,050 but the last few Daily candles show clear signs of indecision and even exhaustion.
Many analysts expected Bitcoin to drop after the ETF approval, even if this is a positive development in the bigger picture. The recent price action and the continued bearish divergence indicated by the Relative Strength Index could be a sign that these predictions may be coming true.
In the short term, it looks like the pair is headed for the support at $45,000, which played a crucial role since December 2023. A break of this level would pressure Bitcoin to move closer to the 50-day Moving Average, where we may see some bounces higher.
