There are some historical moments in crypto ecosystem such as Bitcoin hardfork, Bitcoin Futures ETF, halvings, Seg-Wit updates and recently the debut of inscriptions. Though the number of these big times of crypto can go up, the expected Bitcoin ( Spot ) ETFs might be one of the most important ones.
What makes Spot ETFs so important is that they are going to be the bridge between the real world and crypto ecosystem as a new era financial investment option. Though the futures have been active for several years, they are more like the gambling or " greedy " side of this dynamic ecosystem.
With the arrival of Bitcoin ETFs, we will demand Bitcoin Spot ETF issuers to publicly share the cold wallets with the help of transparency on the chain and the giant hedge funds will be able to allocate some money on this risky market to increase their return on investment.
Basically, the ETFs have several benefits for both crypto and real world investors though they also bear some unpopular risks inherently.
How Do Expected ETFs Affect the Crypto Market?
So far the effects of the ETF hype have revealed blended consequences for the alts. First of all, the narrative of ETFs was the primary reason for the pre - bull market conditions that we are in. It can be seen as the first strike of the match.
As the market has reached a certain level of " saturation ", then the narrative has become a potential risk because the level of tension evolved into a huge concern.
This is the chart of ETF Hype.
The total crypto market cap has increased around 50% thanks to this bullish sentiment. The initial times have been wildly positive as you can witness in the prices of RNDR, INJ, AVAX, SOL, and several other top coins.
The recent history, as expected, does not continue the same " super bullish " atmosphere for the altcoins because they are too risky in an already risky market. After the investors took profit from altcoins, they started to move their funds to Bitcoin from alts.
The second chart shows the recent price action in the total crypto market capitulation excluding the market cap of Bitcoin. Obviously, around $100B has been drained from the altcoins.
As the tension grows, we may see more people escaping from alts to Bitcoin as a natural reflex to feel more secure. As Cointelegraph News mentioned, the steady positions on Bitcoin sign the bullish sentiment on Bitcoin contrary to the current situation in the majority of the altcoins.
If you are not bullish about the prices, you may choose to take positions in put options or you may choose to apply 50% take profit before the news to minimize the risks. It is impossible to make a final decision if the ETFs get approved or not. However, it is in your hands to adjust your portfolio according to your expectations. The market buys the possibility that the ultimate decision of the SEC members will be shared with the public as late as Wednesday afternoon. This might be a perfect time for the SEC to make people wait long enough 😅
What do you do to prepare your crypto bag for the Bitcoin Spot ETFs?
Share your expectations and " hedging " ways below 👇
Hive On ✌🏼