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HomeNewsSpot Bitcoin ETF Approval: Economist Alex Krüger Predicts Market Reaction

Spot Bitcoin ETF Approval: Economist Alex Krüger Predicts Market Reaction

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  • Economist Alex Krüger issues a cautionary statement, suggesting that Bitcoin’s price could face a substantial decline after the approval of spot market exchange-traded funds (ETFs).
  • Krüger outlines a base case scenario for Bitcoin’s price movement, highlighting key dates and potential factors contributing to a post-approval rally or correction.

As the cryptocurrency community eagerly anticipates the potential approval of spot market exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC), renowned economist Alex Krüger has raised a warning flag for Bitcoin (BTC) traders. Krüger, who boasts a substantial following on the social media platform X, suggests that the approval of such ETFs could trigger a “sell-the-news” event, potentially leading to a significant BTC price downturn.

The Krüger Perspective on Bitcoin ETF Approval

Krüger takes a detailed approach to outline his perspective on the scenario surrounding Bitcoin ETF approval:

  1. When to Expect Approval: According to Krüger, the anticipated approval date for these ETFs falls between January 8th and January 10th.
  2. Immediate Reaction: The economist anticipates an initial uptick in Bitcoin‘s price immediately following approval. He attributes this rise to the belief that the market has already priced in the approval news to a significant extent.
  3. Subsequent Market Movement: Krüger predicts that after the initial post-approval surge, Bitcoin’s price will retreat below the pre-approval level as a part of a broader market correction. This correction is expected to unfold approximately two weeks after approval. He cites the current heated market conditions, with altcoins experiencing funding rates between 20% and 60%, as well as Bitcoin’s March futures annualized basis of around 17-20%, as contributing factors.
  4. Post-Launch Scenarios: Krüger outlines two potential scenarios post-launch. If strong inflows and increased trading volume accompany the ETF’s launch, Bitcoin‘s price could re-establish an upward trend. However, a scenario of weak inflows or ETF bid rejections could result in a substantial price decline.

Remaining Cautious in January

Krüger advises traders and investors to remain cautious in January, especially with the uncertainty surrounding the ETF launch date and potential market reactions. He emphasizes the importance of setting alerts and monitoring developments closely, as the crypto community awaits the SEC’s decision on these eagerly awaited ETFs.

At the time of writing, Bitcoin is trading at $42,529, reflecting a marginal increase over the past day. As January progresses, the cryptocurrency market’s response to the anticipated ETF approval will be closely watched, with potential implications for Bitcoin’s price and broader market sentiment.

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Ralf
Ralf
Ralf Klein is a computer engineer specializing in database technology, and as such, he was immediately fascinated by the possibilities of blockchain when he first heard about it, especially since this distributed, tamper-proof technology can be the foundation for much more than just cryptocurrencies. At ETHNews, he translates the articles of his English-speaking colleagues for the German readers. Business Email: info@ethnews.com Phone: +49 160 92211628
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