Although Bitcoin rose to $48,000 after ETF approval, the subsequent trading pressure brought the BTC price down to $38,000.
While the decline in BTC is also effective in altcoins, especially Ethereum, investors are wondering whether this decline will continue.
Evaluating the market in general at this point, QCP Capital analysts stated that they are waiting for spot ETH approvals for the next upward wave.
Stating that it is still unclear whether Ethereum ETF approvals will occur in 2024, analysts said, “If the SEC clusters the final approval dates in one date, as it does for Bitcoin ETFs, we can say that ETH ETF approval is likely.” said.
However, if the SEC delays the decision date on BlackRock and Fidelity's Ethereum ETF application until the end of June at most, that is, if they do not stack, this could be an indication that the SEC has no intention of approving an ETH spot ETF this year.
Analysts who examined the decline in Bitcoin after evaluating the possibility of ETH ETF approval said that these declines were influenced by the news about Mt.Gox refunds, apart from Grayscale sales.
“BTC traded as low as around 38,500 following significant daily outflows from Grayscale of $500 million to $600 million.
At this point, Graysacle has approximately $21 billion in AUM, which is still a large potential supply.
Apart from Grayscale, it seems that the news that Mt.Gox verified BTC addresses for creditor repayments was also effective in Bitcoin's breakout of the $ 40,000 level.”
Analysts recently said that they are following the FOMC meeting on January 31 and the US Treasury's Quarterly Repayment Announcement (QRA) in Bitcoin and cryptocurrency markets.
Stating that they expect the US Treasury to comply with the strategy in November 2023 and issue more short-term debt, QCP analysts said that there are two reasons for these expectations:
” Reason 1: US elections are being held this year. The US will issue more short-term debt to keep liquidity plentiful and US stocks to stay high (beneficial for the incumbent regime, meaning the Treasury Secretary is more likely to retain his seat).
Reason 2: With the expectation that the FED will cut interest rates this year, the US Treasury will want to postpone locking in long-term bond issuances now and prefer to issue long-term debts later when interest rates are lower.”
Analysts said that if the US Treasury issues more short-term debt as they expect, it could bring a rise for risky assets, Bitcoin and cryptocurrencies.
But if the U.S. Treasury surprises the market by choosing to increase long-term debt issuance instead, bond yields will rise again and stocks will sell off sharply.
However, analysts think it is more likely that the US Treasury will issue short-term debt and that the rally will begin as a result.
*This is not investment advice.