Good day everyone,
I hope you are all well and had an excellent week, welcome to CryptoGod-1’s blog on all things crypto. In this post I will be looking at the impact recent rumours on a delay to the Bitcoin ETF has had on the cryptocurrency market, and how this impacts the recent theories of Analyst Glen Goodman.
Analyst Glen Goodman Theory
A recent interview given to Bloomberg by analyst Glen Goodman, the author of 'The Crypto Trader' has discussed how he believes a spot Bitcoin exchange-traded fund (ETF) has already been priced into the existing price of Bitcoin. The market has been eagerly awaiting the US Securities and Exchange (SEC)’s decision on approving a Bitcoin ETF for some time now, and when Goodman spoke about it, he noted that nearly everyone has “bought into” the idea that an ETF is coming. He stated that:
“When it comes to it being priced in, I’d say it’s pretty fully priced in, probably.”
He went on to note that it made things out to be a somewhat lose-lose situation. This means that if the Bitcoin Spot ETF was approved, it should not have a major impact on the existing price of Bitcoin.
He also went on to note what could happen if the “unknown factor”, Gary Gensler, decided to delay it. When considering the impact of SEC Chair Gary Gensler, Goodman stated that he is known for cracking down on the crypto industry. He went on to imply that Gensler has a dislike for all things crypto and this should not be underestimated.
He did speak of the positive signs, suggesting these may mean the approval was all but signed. Included in this was the recent talks between the SEC officials and the ETF hopefuls. Goodman argued that Gensler may seek all applicants to do more work and this could lead to a delay in any approval.
“But Gary Gensler, we know, he never has anything good to say about crypto, does he? So he is the unknown factor in all this. And frankly, he is the boss.”
Goodman also gave his view on the potential of a Bitcoin drop if there was no approval soon. He made it clear how Bitcoin, as seen many times before, is more than capable of crashing and wiping out months of gains in a fraction of time. Goodman noted how the futures funding rates on crypto exchanges he exclaimed they are at "quite frothy levels.” He noted how many people are borrowing lots of money to purchase Bitcoin.
“If we get the impression from [the SEC] that the delay is open-ended as opposed to just ‘oh, we just want a few final things done,’ then it could be really bad.”
If the price falls, as happened on the 3rd of January 2024, Goodman noted how a domino effect could begin where accounts start getting liquidated because people have overstretched themselves on leverage. Goodman noted how he was not selling his Bitcoin, but that he had lightened up on his holdings after having held them for a long time.
Bitcoin Spot ETF Delay
On the 3rd of January 2024 over $460 million in longs were liquidated across the crypto market in an hour as the price of Bitcoin plummeted by 8% on rumours that the SEC might delay spot ETF approval. This was based on data by CoinGlass, which stated how around $462 million in losses across major centralized exchanges occurred over the past hour.
In 24 hours 172,626 traders were liquidated with the total long liquidations coming in at $539 million, while short liquidations came in at only around $36 million. OKX was the main culprit for the liquidations, with over $254 million there alone, while Binance was the next biggest with $135 million. The majority of the liquidations came within the space of an hour as the market reacted to the rumours. Bitcoin-tracked futures experienced $110 million in both short and long liquidations over the past day while Ethererum-linked futures saw over $82 million in liquidations.
These constituted as record levels of liquidations as the leading cryptocurrency crashed to as low as $40,000 following a report from Matrixport which claimed the SEC is poised to reject spot Bitcoin ETF applications this month.
“Matrix on Target projects a January rejection for Bitcoin Spot ETFs by the SEC, cautioning traders to hedge long exposure,” the company wrote in a recent post on X (formerly Twitter). With SEC Chair Gensler’s skepticism towards crypto, a potential -20% Bitcoin price drop is anticipated upon ETF denial, though a positive end-of-2024 outlook remains.”
At the time of writing Bitcoin is trading at around $42,400. While the price has seen recent rises and falls, many based on Bitcoin Spot ETF speculation, the ability for Bitcoin to drop and then jump back up just as fast is well known. Over the long term, getting a Bitcoin Spot ETF approved would be excellent news and open up new possibilities in the market. Until it is approved, and possibly even for a long time afterwards, the price of Bitcoin is likely to be impacted by the Spot ETF rumours. For good or for bad, this is how things are.
Have a great day.
Peace. CryptoGod-1.
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