Bitcoin ETF approval: How has the crypto market outlook changed (2024)

The recent approval of 11 spot Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) has sent ripples of excitement through the global crypto community. This milestone has been heralded as a game-changer, with industry experts anticipating significant shifts in the market dynamics.

Edul Patel, CEO & Co-founder of Mudrex, asserts, "The SEC's approval of Bitcoin spot ETFs will attract institutional investors who were previously cautious due to regulatory concerns. There will be increased institutional interest which could further lead to higher liquidity and more stability in the market, which may have a global impact, including in India."

Positive developments in the US crypto space often have a ripple effect on global market sentiment. Edul emphasizes that "As the SEC's approval is now seen as a vote of confidence in the legitimacy and maturity of the crypto market, this is set to boost confidence among investors worldwide. As regulatory bodies are also monitoring the global regulatory trends, it is likely that regulators in India might adjust the policies or approach towards crypto-related financial products."

While the immediate effects might be evident in the Bitcoin market, the legitimization of crypto investment through regulated spot ETFs has broader implications. Edul Patel notes that this could attract a diverse investor base, encouraging increased capital flows across various cryptocurrencies. Notably, major players like BlackRock have already filed for Ethereum spot ETFs, and the industry is eagerly awaiting potential approvals in this space.

Looking ahead, the confluence of ETF approvals, the upcoming halving, and regulatory clarity sets the stage for a promising year for Bitcoin. Patel predicts, "The year 2024 holds immense promise for Bitcoin, as the confluence of ETFs, halving, and regulatory clarity is set to drive demand. It is expected that BTC will cross its previous highs of 69k." The anticipation is not only for short-term gains; Patel forecasts a substantial influx of 5-7 billion in the next three months, with institutions potentially allocating 1-3% of their capital to Bitcoin over the long term (2-5 years).

On January 10, 2024, the US securities regulator approved the first US-listed exchange-traded funds to track bitcoin, in a watershed for the world's largest cryptocurrency and the broader crypto industry.

Spot Bitcoins that have received approval from the US financial regulator include Grayscale Bitcoin Trust, Bitwise Bitcoin ETF, Hashdex Bitcoin ETF, iShares Bitcoin Trust and the Valkyrie Bitcoin Fund. Similarly, ARK 21Shares Bitcoin ETF, the Invesco Galaxy Bitcoin ETF, the VanEck Bitcoin Trust, the WisdomTree Bitcoin Fund, the Fidelity Wise Original Bitcoin Fund and the Franklin Bitcoin ETF.

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