Spot Bitcoin ETFs are Here: What Went Wrong?
As for Bitcoin, I truly think the best is yet to come and sooner rather than later.
avatar
Mike Sakuraba graduated with double major of English and Economics. Part time writer, part time investor, full time dad. Mike loves writing about technology, sports, and investing.
2024-01-13 11:29

It was supposed to be a historic moment for the crypto industry: traditional finance was finally interested in Bitcoin. Companies like Blackrock and Fidelity were providing a way for regular investors to add exposure to Bitcoin in any investment account. It was a decision we had been waiting on for years. Billions of dollars of funds would flow into these spot Bitcoin ETFs and cause a major demand spike, sending our crypto token prices higher. So what went wrong?
Spot Bitcoin ETFs are Here: What Went Wrong?
Earlier this week, the SEC finally approved the trading of spot Bitcoin ETFs in the US markets. Trading volume for these 11 ETFs hit more than $4 billion in the first two days. Yet, crypto prices tanked as Bitcoin fell nearly 15% from peak to trough, and the global crypto market cap fell by more than 5.0% in less than 24 hours. Non-crypto holders were laughing and calling it a rug pull. Sell the news officially became a meme and then it became a reality.

Crypto-related equities tumbled as shares of Coinbase (NASDAQ: COIN) fell by nearly 20% this week. Coinbase is the trusted custodian for most of the spot Bitcoin ETFs and was a major player in helping these companies get their applications approved. Is it time to panic? Or is this just a spot of volatility before we moon again?

Sell the News Will Shake Out Weak Hands
I don’t think this is the death knell for the crypto industry that some people are calling for. It is concerning but there was so much anticipation for this that the prices of cryptos rallied hundreds of percentage points over the past few months. In other words, some steam needed to be let out of the kettle.

If you think spot Bitcoin ETFs are bad for the crypto industry, then I’m not sure what to say. There was certainly some volatility expected as spot Bitcoin shifted around and funds exited centralized exchanges for the perceived safety of brokerage accounts. It was never going to be a smooth transition.

The same thing happened when the Bitcoin futures ETF began trading. It also marked an all-time high top for Bitcoin when Coinbase had its IPO in April 2021. The crypto industry loves to sell the news. Do you know what they love to do even more? Buy the dip.

I’m not saying we’re going straight back to all-time highs. I do think that this is just a temporary period of volatility that needs to be taken in stride. Bitcoin is re-testing some key levels of resistance while Coinbase’s stock needed to see a pullback to some key moving averages. Currently, the $115 price level is a gap fill that is acting like a magnet and would be an excellent area for resistance to turn into support.

As for Bitcoin, I truly think the best is yet to come and sooner rather than later. Companies like Blackrock do not get into an asset class if they don’t think it won’t make them money. Bitcoin is a real asset now but most of all it can make them a profit. Ride the waves now and dollar-cost average, because I think this will all be in the rear-view mirror sooner than most people think.


Disclaimer: I have no positions in any of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. All information should be independently verified and should not be relied upon for purposes of transacting securities or other investments. See terms for more info.

Rate this article

positive
negative
Published On
2024-01-13 11:29

avatar
About the Author
Mike Sakuraba graduated with double major of English and Economics. Part time writer, part time investor, full time dad. Mike loves writing about technology, sports, and investing.


buy-coffee
You've read 1 article in the last year
..thank you for supporting us and for visiting our site. Unlike many other sites, The Dog of Wall Street is available for everyone to read. Our focus is to provide great content for free. Do you like what we are doing? Buy us a cup coffee. It is the fuel that keeps us going..

NVIDIA Earnings: Will They Even Matter?
Let’s examine the bear and bull case for NVIDIA’s earnings next Wednesday.
By Mike Sakuraba | 2 weeks ago

2 Stocks I'm Avoiding as Markets Hit New All-Time Highs
People like to throw around the term bubble a lot when the market goes up a large amount in a short time. But is it really a bubble or did they just miss out on the action? I usually say it’s the latter.
By Mike Sakuraba | 3 weeks ago

2 Earnings Calls I'm Watching Next Week
It’s been a while since I’ve done this but it was a good practice and forced me to actually listen to the earnings calls of companies I invest in.
By Mike Sakuraba | 3 weeks ago

2 Stocks You Can Still Buy at All-Time Highs
For some reason, we have always been taught to try and buy low and sell high. While that might seem logical, it is a good way to miss out on buying some of the best stocks.
By Mike Sakuraba | 3 weeks ago

24 Assets to Invest in for 2024: Part 7
In Part 6, I spoke about chip stocks, Axon (NASDAQ: AXON),Celsius (NASDAQ: CELH),and the iShares Bitcoin Trust (NASDAQ: IBIT).
By Mike Sakuraba | 4 weeks ago

2 Stocks I'm Buying When Markets Pull Back
Here are 2 stocks I’m prepared to pull the trigger on as soon as the market pulls back.
By Mike Sakuraba | 4 weeks ago

24 Assets to Invest in for 2024: Part 8
In Part 7, I spoke about Rivian (NASDAQ: RIVN),Chainlink, and Evolution AB (OTC: EVVTY)
By Mike Sakuraba | 4 weeks ago

Tesla Bears Rejoice: Another Bad Quarter from Tesla
I think the next year or two is going to be tough for the company and the stock.
By Mike Sakuraba | 1 month ago