Opinion: Bitcoin ETF could lead to cryptocurrency price crash in this case!
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Answer Opinion: Bitcoin ETF could lead to cryptocurrency price crash in this case!
Hopes for the approval of a Bitcoin ETF in the US rose recently, after Gary Gensler, the head of the US Securities and Exchange Commission (SEC) suggested that it would be open to Bitcoin futures-based trading funds.
As the crypto community awaits the SEC’s decision on crypto ETFs this month, launching such a product will not bode well for the cryptocurrency’s price in the short term, says Dan Morehead, CEO of Pantera Capital.
The end of the bear market:
In a newsletter, Moorehead noted that we are now in a bull market after a short period of chaos involving fears of China and its ban on cryptocurrency transactions and the mining industry.Read:The Securities and Exchange Commission (SEC) has fined the Rivetz crypto project more than $18 million
Bitcoin has been booming since the beginning of this month.
Bitcoin is trading at $57,000 at the time of writing, which is a few thousand from the $65,000 historical high recorded in April 2021.
Some critics expect further gains for Bitcoin in the last quarter of this year.
But Moorehead believes that the possible launch of a Bitcoin ETF could halt Bitcoin’s bullish run.
A Bitcoin ETF will track the price of Bitcoin, giving institutional investors exposure to Bitcoin without necessarily having to hold the cryptocurrency physically.
According to Dan Morehead, the Bitcoin ETF could hurt the upward movement of Bitcoin.
For years, the crypto community expected SEC approval of a Bitcoin ETF due to the lack of regulated alternatives for institutional investors.
But the regulator has rejected all bitcoin ETF proposals thus far on the grounds that there is insufficient protection for investors.
Most crypto investors believe that the launch of the Bitcoin ETF will push the price of the cryptocurrency higher.
But Pantera’s Moorehead sees it as a selling moment based on buying the rumor and selling the news.
Morehead cited two major cryptocurrency events in the past that resulted in a market pullback despite starting with an optimistic outlook.Read:Why Digitex Futures Coin & Token (DGTX) Drops Over 70%
The first event was after the Chicago Mercantile Exchange unveiled bitcoin futures in December 2017.
At the time, investors were hoping that the listing of bitcoin futures on the Chicago Mercantile Exchange would send the cryptocurrency to the moon.
But the currency did not rise, but on the contrary, it fell by 83%, according to “Moorhead”.
This dismal trend was repeated again this year when the shares of the crypto company “Coinbase” were listed on the Nasdaq exchange, as the currency soared and reached a record high of $ 64,000, after which it fell by 53%.Read:Find out the amount and value of cryptocurrencies seized by the US Cybercrime Unit in 2021
Morehead suggests that a similar scenario could be seen if the SEC approves a Bitcoin ETF.
Morehead: Bitcoin will be positive in the long term
While Moorehead believes we will never again enjoy a 100% rally this year, he supports the long-term bullish view of the larger cryptocurrency, stating:
While we’ve had two 83% bear markets already, I think they’re part of our primitive past.
Future bear markets will be shallow.
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