Cryptocurrency enthusiasts were in high spirits on Thursday as the launch of multiple spot Bitcoin (BTC) ETFs in the U.S. marked a historic day for the industry and added a greater degree of legitimacy in the eyes of the investing community.
The development was not without its detractors, but there is no going back now as some of the largest asset managers in the world, including BlackRock and Fidelity, have already seen billions of dollars worth of volume for their newly listed ETFs.
Stocks fell at the market open after the latest Consumer Price Index (CPI) report showed a slight uptick in inflation in December, coming in at 0.3% over the previous month and 3.4% year-over-year, which were higher than the expected 0.2% and 3.2%, respectively.
The major indices managed to regain most of the lost ground as the trading day progressed, and at the closing bell, the S&P finished down 0.07% while the Dow and Nasdaq were flat.
Data provided by TradingView shows that Bitcoin’s price hit a two-year high of $49,111 near midday, but has since pulled back to $46,240 at the time of writing, for a gain of 1.12% on the 24-hour chart.
BTC/USD Chart by TradingView
Currently, the daily candle is forming a doji, which suggests indecision in the market as bulls and bears now find themselves evenly matched. Analysts are also split on whether BTC will trade sideways from here or climb higher as institutional inflows into spot BTC ETF products rise.
Data from the futures market indicates that “Bulls have the solid overall near-term technical advantage and have restarted a price uptrend on the daily bar chart,” according to Kitco senior technical analyst Jim Wyckoff.
Bitcoin futures 1-day chart. Source: Kitco
“The uptrend is the bulls’ friend, suggesting more upside in the near term,” Wyckoff said.
The debate leading up to the ETF launch centered around whether it would be a “buy the rumor, sell the news” event, but things haven’t played out as either the bulls or bears were expecting thus far.
“Pretty much the only thing the approval of the launch of BTC ETFs has caused is volatility,” said Julius de Kempenaer, Senior Technical Analyst at StockCharts.com, in a note to Kitco Crypto.
“After the announcement, the initial move pushed BTC to 49k where it ran into the heavy overhead resistance area around 48k offered by the March 2022 high,” he said. “Following that test BTC dropped back to the support zone around 45k which marked the upper boundary of the trading range between 40-45k that lasted from early Dec 2023 to early Jan 2024. And now the market seems to be coming to a rest.”
“So both sides were right,” de Kempenaer said. “The camp that said BTC would surge after the approval got their way, but also the camp that argued that the approval was already priced in and BTC would not rise, or maybe even fall, were right. Both to a degree of course.”
He said the way the launch played out “is a great example of how markets work based on supply and demand and how former highs and lows act as support and resistance levels/areas regardless of ‘events.’”
Moving forward, de Kempenaer said he is “curious to see how well these ETFs will be doing in the next couple of weeks/months and which ones will still be around in say 2-3 years.”
“The bottom line is that these ETFs will generate additional demand for BTC which will be a positive impulse and it can be expected to cause further strength in BTC going forward,” he said. “In any case, it will not cause selling pressure.”
“For the time being the overhead resistance around 48k remains in place and that needs to be broken to free the way for further upside movement,” de Kempenaer concluded.
One person who has grown even more bullish on the outlook for Bitcoin following the launch of multiple spot ETFs is Cathie Wood, founder and CEO of ARK Invest, which launched its ARK 21Shares Bitcoin ETF on Thursday.
“Our base case is in the $600,000 range,” Wood said during an interview on CNBC’s Squawk Box. “Our bull case – and we think the probability of the bull case has increased with this SEC approval, this is a green light – our bull case is $1.5 million by 2030.”
Source: ARK Invest
“You can see the [price forecast] building blocks [on Ark Invest’s website],” Wood said. “You can see how conservative we are in terms of those building blocks. This is a big idea. It is the first global, decentralized, digital, rules-based – critical there – rules-based monetary system in history. It is a very big idea.”
Breakout day for altcoins
It was a sea of green in the altcoin market as only four tokens in the top 200 lost more than 1%, while several dozen projects recorded double-digit price increases.
Daily cryptocurrency market performance. Source: Coin360
Sui (SUI) is the biggest gainer at the time of writing, up 43% and trading at $1.13, followed by a 42.5% increase for Ethereum Name Service (ENS), and a gain of 35.54% for Ethereum Classic (ETC). Lido Dao (LDO) led the laggards with a loss of 3.45%, while Akash Network (AKT) was down 3.22%, DAO Maker declined 2.55%, and Chromia (CHR) pulled back 1.3%.
The overall cryptocurrency market cap now stands at $1.78 trillion, and Bitcoin’s dominance rate is 51.3%.
