Bitcoin soars above $45,000. Countdown to Etf on Wall Street

Bitcoin starts 2024 with a bang. The price of the leading cryptocurrency has moved above the $45,000 barrier, as it hasn't in 21 months. After proving to be the best-performing asset class of 2023 (+156%), the value of the unit of account that runs within the blockchain devised in 2008 by Satoshi Nakamoto also rose during the first session of the new year, in the same session in which the US stock exchanges suffered with a drop of more than one percentage point for the Nasdaq 100 index.

The all-time high of $69,000 reached in November 2021 is 50% away. Supporting the listing in recent months has been the narrative about the launch of the first spot price ETF (current and not based on futures contracts) on Wall Street. There are currently 13 investment houses vying for clearance from the US Securities Exchange Commission (SEC) led by Gary Gensler. Although he taught blockchain at MIT in Boston prior to his tenure at the SEC, he has so far always denied approval for an Etf on Bitcoin. This time, however, could be the charm. And this is what the market has been banking on, driving the price of the cryptocurrency (and of Nasdaq-listed companies orbiting the sector such as Coinbase and MicroStrategy) forward in recent weeks.

Traders' optimism stems from the fact that in this new round of applications the SEC has been much more proactive, urging applicants on several occasions to submit additional documents to make the application more complete. So much so that, according to Bloomberg analysts, the probability that the ETF will be approved by 10 January is 90%. Why 10 January? Because that date is the last possible response (for better or worse) that the SEC will have to provide to 21Shares/Ark Invest, the two investment houses that together and first this time last year filed for listing. They were joined by 12 others, including Invesco, Fidelity and, above all, BlackRock.

The latter is the world's leading asset management company with assets of around $10 trillion. The change of gear of CEO Larry Fink - who in the past had defined Bitcoin as a tool for money laundering, while recently on several occasions he has spoken of it as a new form of 'digital gold' - seems to have turned the dilemma over the Etf, not least because BlackRock boasts an incredible track record with the SEC (575 approvals out of 576 applications).

At this point, approval of the Etf is almost taken for granted by the market and could come in the next few hours. Given the high expectations that have been created around this product, a rejection by the SEC would be a heavy surprise, a grey swan. It should be pointed out that on some European exchanges (Switzerland, Germany) it is already possible to buy funds that replicate the price of Bitcoin (in the form of Etn or Etc) but the market expects a much more significant reach for Bitcoin from a spot Etf listed on Wall Street. This is both because the US marketplace is the most liquid in the world and because such a product could push issuing companies to invest much more in funding through the retail public and, above all, those institutional investors who might so far have wanted to invest in Bitcoin but have remained at the window so as not to run the risk of having to do so through poorly regulated exchanges. If the Etf is approved then, from a fundamentals point of view, it will certainly be good news for the crypto community. We must be careful, however, at least in the short term, of the 'sell on news' hypothesis, i.e. that all those who bought before the news, speculating on a price rise, decide to take profit when the news is certain. For better or worse, the soap opera will be over in a few days.