The approval of the highly anticipated spot-based Bitcoin exchange-traded funds (ETFs) is partially priced in, according to Coinbase Institutional's David Duong.
Spot-based ETFs are expected to open the doors for mainstream crypto money. However, the expected flow of money into spot-based ETFs will likely occur over time.
“Bitcoin Spot ETF Approval Partially Priced”
Duong, head of institutional research at Coinbase Institutional, noted in the latest monthly report that the potential approval of at least one spot Bitcoin ETF is already partially priced in. This makes it more uncertain how Bitcoin might perform in the event of a positive US Securities and Exchange Commission (SEC) decision.
Duong also highlighted the inverse correlation between cryptocurrency prices and changes in the term structure of the US Treasury yield curve since the middle of the first quarter of 2023.
The analyst noted that there is a relatively weak linear relationship between Bitcoin and the recent rise in the yield curve, with the 90-day correlation coefficient being 0.45. On the other hand, Ethereum shows a strong inverse correlation with a correlation coefficient of 0.76.
Duong said this divergence occurred in mid-June, when a large number of spot BTC ETF applications were filed in the US. Duong also added that if at least one of these applications is approved, there could be meaningful fund inflows into the BTC market, but these may take time to materialize as markets tend to be impatient.
Drawing similarities to the SPDR Gold Shares ETF (GLD), which was the first spot gold ETF in the US, launched 19 years ago and now has over $50 billion in assets, Duong said GLD had an inflation-adjusted income in the first 30 days after launch. He stated that he attracted only 1.9 billion dollars, but at the end of the first 12 months, this figure increased to 4.8 billion dollars.
*This is not investment advice.