Despite the optimistic expectation that the first Bitcoin spot ETF in the US will be approved by January 10th, according to a recent survey released by cryptocurrency index fund management companies Bitwise and VettaFi on January 5th, only 39% of respondents believe that a Bitcoin spot ETF will be approved by 2024. As the approval process reaches a critical moment, Bitcoin may face greater volatility.
Bitwise Asset Management and VettaFi have released their sixth annual “Bitwise/VettaFi 2024 Financial Advisor Attitudes Benchmark Survey” report, which collected responses from 437 financial advisors between October 20th and December 18th.
Only 39% believe it will be approved
The report found that only 39% of advisors believe that a Bitcoin spot ETF will be approved by 2024. However, Bloomberg ETF analysts believe that there is a 90% chance of a Bitcoin spot ETF being approved in January of this year.
The majority of respondents believe that the approval of a Bitcoin spot ETF is an important catalyst, with 88% of advisors interested in buying Bitcoin waiting for the approval of a Bitcoin spot ETF. Additionally, access to cryptocurrencies is still limited, with only 19% of advisors stating that they can purchase cryptocurrencies in client accounts.
Other key findings from the survey include:
– 98% of advisors who currently allocate cryptocurrencies in client accounts plan to maintain or increase these investments in 2024.
– 59% of advisors stated that their “partial” or “all” clients invest in cryptocurrencies outside of advisory relationships.
– 64% of advisors believe that regulatory uncertainty is the main obstacle to wider adoption of cryptocurrencies in investment portfolios, while 47% consider volatility as a secondary urgent issue.
– Compared to Ethereum, 71% of advisors prefer Bitcoin, a significant increase from 53% in the previous year.
Bitcoin may face greater volatility
Whether the US Securities and Exchange Commission (SEC) will approve a Bitcoin spot ETF application before January 10th, as expected by the market, is influencing the direction of the Bitcoin market.
A research report released by Matrixport warned that as the SEC’s requirements for a Bitcoin spot ETF have not been fully met, the SEC will not pass any Bitcoin spot ETF in January. As a result, Bitcoin experienced a sharp drop of over $4,000 within an hour on the night of January 3rd, falling from around $45,000 to $40,750, causing numerous liquidations.
However, shortly after, Fox Business cited informed sources reporting that the SEC may approve an ETF as early as this Friday. As a result, the Bitcoin price quickly recovered and rose back to $45,000 in the morning before experiencing a slight decline to $43,484 at the time of writing, with a 24-hour increase of 1.3%.
Bitfinex analysts pointed out that derivatives traders currently expect “unprecedented” volatility in the Bitcoin market. Signals from the options market indicate that the current volatility expectations of derivatives traders are higher than the volatility levels throughout 2023. The current implied volatility of Bitcoin has surged to a new three-month high of 70.1%, surpassing the historical average volatility of 41.1%. Bitfinex analysts reminded people to pay attention to the surge in short-term implied volatility as the SEC is about to make a decision, indicating that investors must be aware of greater volatility.