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According to the plan, January 10 will be the deadline for the US Securities and Exchange Commission (SEC) to officially announce the launch of some spot bitcoin exchange-traded funds (ETFs) on stock exchanges.
This makes derivatives investors "restless", because they are considering whether to spend a lot of money to invest in this product.
Data from Coinglass shows that open interest—the amount of money invested in bitcoin futures—has been steadily rising since October 2023, reaching a two-year high of $19.2 billion in early December. It is currently hovering between $17 billion and $18 billion, up from the $9.5 billion to $14.5 billion range that was seen for most of 2023. Experts at analytics firm Amberdata expressed excitement as they await the SEC’s decision.
Since 2013, the SEC has rejected several applications for bitcoin ETFs, citing the cryptocurrency market as susceptible to manipulation. However, by the end of 2023, the SEC was in discussions with companies planning to launch spot bitcoin ETFs, raising hopes that these funds would soon hit the market, fueling a wave of bitcoin investment. Some argue that listing spot bitcoin ETFs would allow investors to access digital currencies through traditional stock exchanges.
According to Coinglass, bitcoin transaction fees and execution costs have increased across exchanges this year, showing that investors are willing to spend heavily to maintain long positions, and the ratio has been mostly positive since October last year. Recently, in the first trading session of 2024, bitcoin, for the first time since April 2022, rose above $45,000. In 2023, the world's most popular cryptocurrency increased by a total of 170%.
However, some market observers warn that negative news about the ETF could trigger a sell-off. After an initial surge, bitcoin's spot price fell below $43,000, although the digital currency has since recovered. Dessislava Aubert, a senior analyst at Kaiko Research, said the slide triggered a sell-off, with bitcoin's open interest falling by more than $1 billion. Jag Kooner, head of derivatives at Bitfinex, said even an ETF approval could send bitcoin's price lower as investors take profits, reflecting the sensitivity of the digital currency market to news and regulatory changes.
