Fineqia International analyst says that Bitcoin’s poor performance does not mean the failure of ETF launch
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The crypto community celebrated last week as the US Securities and Exchange Commission (SEC), the country’s securities regulator, finally approved spot Bitcoin ETFs, after a full decade of rejections. However, Bitcoin reacted with a short-lived surge, which then turned into a sharp correction. Now, however, a research analyst at Fineqia International claims that the coin’s “subdued” price does not necessarily mean that the launch had failed.
The analyst in question, Matteo Greco, commented on the volatile end of the last week, providing some insight into the “buy the rumor, sell the news” market behavior.
His perspective is that this is a common pattern and that the market followed it to the letter. Investors anticipated ETF approval with a 90% probability, and they strategically adjusted their portfolios prior to the SEC’s approval announcement, as Greco explained.
After the approval, profits were taken on lower-priced positions, and the capital was then reallocated to altcoins.
Furthermore, Bitcoin had already seen a 57% increase in Q4 2023 alone, going from around $27k at the start of the last quarter to $42.3k at its end. After the approval, the coin spiked up even further, reaching nearly $49k, which triggered a series of profit-taking.
BTC ETF launch did not fail
Greco says that the fact that this pattern had played out does not mean that the ETF launch was a failure. In fact, in the first two days of trading, 11 BTC spot ETFs saw a combined inflow of $1.4 billion. The figure was then partially offset by a $600 million outflow from Grayscale BTC ETF.
Greco explained this by blaming higher management fees, stating that this also does not imply that the ETF had failed but rather that investors have seen a strategic shift in their preferences.
He noted: “The price action of BTC, coupled with volume data and the performance of certain altcoins, demonstrates the adherence to the typical “buy the rumor, sell the news” pattern associated with major market events. Market participants, anticipating the ETF approval with a 90% probability, adjusted their portfolios accordingly before the SEC approval. This pattern is a common occurrence and does not signify a failure in the ETF launch.”
Following the price drop, the coin remained flat over the weekend, a the arrival of the new week brought only minor volatility. For the most part, BTC remains flat even now, although it is showing signs that it might be ready to kick off a recovery. For now, it sits right underneath the resistance at $43k, currently still too weak to breach it, but it is likely only a matter of time before the price surges past this level and makes a recovery.
