The ETF approval threshold is approaching, and BTC surged overnight, breaking through 45,000 USD

Original | Odaily Planet Daily

Author | Azuma

As the approval of the Bitcoin spot ETF approaches, the sentiment in the crypto market continues to heat up.

From last night to this morning, the market experienced another significant rise. According to OKX market data, BTC briefly broke through 45,000 USDT, reaching a high of 45,406.7 USDT, with a 24-hour increase of 5.66%; ETH also approached 2,400 USDT, peaking at 2,397.76 USDT, with a 24-hour increase of 2.7%.

In addition to BTC and ETH, some altcoins that have shown strong momentum recently also continued to perform well. As of the time of writing, SOL is reported at 111.57 USDT, with a 24-hour increase of 7.4%; ARB is reported at 1.74 USDT, with a 24-hour increase of 9.8%; TIA is reported at 13.85 USDT, with a 24-hour increase of 14.8%; SEI is reported at 0.7879 USDT, with a 24-hour increase of 35.19%.

Due to the overall upward trend, the total market capitalization of cryptocurrencies has also surged. CoinGecko data shows that the total crypto market cap has surpassed 1.81 trillion USDT, with a 24-hour increase of 4.8%. The trading enthusiasm among crypto users has also significantly risen, with today's fear and greed index reaching 71, classified as "greed."

In terms of derivatives trading, Coinglass data shows that in the past 12 hours, the entire network experienced liquidations of 111 million USDT, with the vast majority being short liquidations, amounting to 92.9259 million USDT. In terms of cryptocurrencies, BTC saw liquidations of 57.05 million USDT, while ETH saw liquidations of 14.4 million USDT.

ETF Approval Approaches

Looking at the news, the most significant factor currently influencing market trends is the approval dynamics of the Bitcoin spot ETF.

As of last Friday, several ETF issuers, including BlackRock, VanEck, Valkyrie, Bitwise, Fidelity, WisdomTree, Ark, and 21 Shares, have submitted updated application documents to regulators, detailing arrangements regarding Authorized Participants to ensure trading liquidity once the ETF is launched.

According to the application regulations, the final approval deadline for the above-mentioned ETF applications by the U.S. Securities and Exchange Commission (SEC) is January 10, which means the SEC must make a decision to "approve" or "reject" before January 10.

Previously, several ETF experts had predicted the time window for the SEC's final approval. Nate Geraci, president of The ETF Store, believes the SEC could make a decision as early as January 2 (today!); Bloomberg analyst James Seyffart thinks the SEC might announce between January 5 and January 10; Swan Bitcoin CEO Cory Klippsten predicts a time window from January 8 to January 10.

However, according to a recent report by FOX reporter Eleanor Terrett, the SEC still needs time to review the updated documents submitted by major ETF applicants last Thursday and Friday regarding Authorized Participants, and needs to comment on them. Considering that the SEC has been on a New Year holiday since last Friday, it is unlikely that a decision on the ETF will be made immediately after returning to work early this week (Tuesday or Wednesday).

Note from Odaily Planet Daily: There are reports that "BlackRock revealed the SEC might make a decision over the weekend," but this news is a false report. Another FOX reporter, Charles Gasparino, confirmed that BlackRock has received a silence order from the SEC and will not comment on the matter.

From the structure of the options market, it seems that the market is also leaning towards Eleanor's statement. Adam, a macro researcher at Greeks.live, posted on platform X, stating: "Although there are rumors that the BTC spot ETF might pass this week, the options market data shows that the highest implied volatility (IV) is still for options expiring on January 12. Currently, the IV for at-the-money options expiring on January 12 is close to 70%, significantly higher than before the holiday and well above the average level of 60% for medium to long-term IV. Institutional investors still believe that the second week (closer to January 10) will be the time point for the ETF news to land."

Yes or No? Still an Unknown

Despite the current investment sentiment suggesting that the market generally holds a positive attitude towards the approval of the Bitcoin spot ETF, as Eleanor emphasized: "The SEC is unpredictable."

Before the SEC makes a final decision, no one knows whether the approval will be a yes or a no.

Last week, John Reed Stark, former director of the SEC's Internet Enforcement Office, commented on the outcome based on his 20 years of experience at the SEC. John stated that although he personally holds an opposing view, if the recent reports about discussions between the SEC and all ETF applicants are true, then based on his personal experience, it seems possible for the SEC to approve the spot Bitcoin ETF.

However, at the same time, there are voices in the market suggesting that the SEC will not open the green light for now. For example, Joy Lou, co-founder of LD Capital, stated: "I don't think it will pass, and BTC prices won't see much volatility."

What will the final outcome be? The answer will be revealed in eight days.