● The U.S. Securities and Exchange Commission's (SEC) approval of the launch of 11 bitcoin exchange-traded funds (BTC ETFs) surged in bitcoin trading volumes.
● On the first day of the launch of trading in spot bitcoin ETF units, about 700,000 transactions were made, and the trading volume reached $4.33 billion. Half of this volume, or $2.1 billion, came from Grayscale's bitcoin ETF, and another $1 billion came from a fund launched by BlackRock.
● Bitcoin price consolidation is a good starting point for further growth. The next target is $50,000 by the end of April 2024.
The U.S. Securities and Exchange Commission (SEC) has approved the launch of 11 bitcoin exchange-traded funds (BTC ETFs) on 10 January 2024. The authorisation to create exchange-traded bitcoin ETF funds is a key regulatory move that will make it easier for ordinary investors to put their money into the digital currency and spur its continued growth. The commission had previously withheld approval for ten years.
The SEC's decision is an important milestone for the cryptocurrency industry as the spot bitcoin ETFs allow investors to access bitcoins directly without owning them by buying shares of these funds, which buy bitcoins directly.
However, while it is a good tool for investors, it is not for traders, according to Kar Yong Ang, analyst at Octa. 'Investing in spot bitcoin ETFs is different from buying bitcoins directly for several reasons. Firstly, investors who invest in bitcoin ETFs do not own bitcoins directly. Secondly, financial companies will charge a commission for trading and managing bitcoin ETFs.' 'In contrast, people who buy bitcoins directly through brokers only pay a transaction fee, and there are no investment management costs', he added.
Investors are relying on the emergence of spot bitcoin ETFs to pump billions of dollars into the digital currency, making investing more accessible and less intimidating. Thus, as demand for bitcoin rises, so will its price, which is likely to spur more investment and interest in the cryptocurrency. Increased investment in bitcoins, combined with the introduction of new products from reputable financial players, may also accelerate the adoption of sensible regulations aimed at eliminating fraud and normalising cryptocurrency to invest, make payments and, more broadly, conduct business.
As we can see, investors' expectations are being met. On the first day of the launch of trading in spot bitcoin ETF units, about 700,000 transactions were made, and the trading volume reached $4.33 billion. Half of this volume, or $2.1 billion, came from Grayscale's bitcoin ETF, and another $1 billion came from the fund launched by BlackRock.
In the first hours after the trading launch, bitcoin's price approached $49,000, but the cryptocurrency failed to consolidate above this level. Some investors expectedly preferred to lock in profits and sell coins, which pressured the bitcoin rate and restrained its growth. Nevertheless, on higher timeframes, the overall uptrend looks stable. The growth of BTC prices from the inflow of institutional capital will be less rapid and manifest itself in the long term.
The bitcoin price consolidation is a good starting point for further gains. Traders should look for bitcoin buying opportunities before the bitcoin halving procedure, which will take place around the beginning of April,' said Kar Yong Ang, the Octa financial market analyst. He added that In such a situation, bitcoin could resume growth and overcome the critical resistance level of $50,000 by the end of April 2024.
About Octa
Octa is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services already utilised by clients from 180 countries with more than 42 million trading accounts. Free educational webinars, articles, and analytical tools they provide help clients reach their investment goals.
The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.
Octa has also won over 60 awards since its foundation, including the 'Best Educational Broker 2023' award from Global Forex Awards and the 'Best Global Broker Asia 2022' award from International Business Magazine.
