The amount invested in these bitcoin futures has been steadily increasing since October, reaching $19.2 billion in early December, which is the highest level in two years, according to information platform Coinglass. Now, according to Reuters, it is around eighteen billion dollars. This is still a significant increase from the ten to fourteen billion seen for most of last year.
“We eagerly await the commission’s decision,” analysts at Amberdata told Reuters. “This decision was already reflected in the prices in October, which now only heightens the feeling of anticipation.”
The approval of bitcoin funds would allow access to the cryptocurrency through mainstream exchanges, which could attract large investors. Since 2013, several companies have applied for permission for these funds, but the Securities and Exchange Commission has so far rejected them, saying that such products would be too susceptible to manipulation.
However, at the end of 2023, a series of talks held by the Commission with investors raised hopes that the long-awaited funds will get permission to enter the market and trigger an influx of bitcoin investments.
On January 2, expectations had already driven bitcoin above the $45,000 level, after a 170 percent increase in price for the whole of last year. Then came a return below 43,000 and a subsequent swing to $47,000.
But excessive optimism could quickly turn to panic if the Securities and Exchange Commission decides not to grant permission to the funds for some reason. Then, on the contrary, a wave of sales could be expected, analysts warn.
Paradoxically, the expected approval of bitcoin funds can also cause market volatility. “Investors could then choose to take out some of the profits,” says Jag Kooner, head of derivatives at Bitfinex. This, he said, highlights the market’s sensitivity to news and regulatory developments.
So far, however, everything indicates that everyone is only looking forward to further growth of tens of percent. Coinglass’ Crypto Fear & Greed Index, which measures market sentiment, is now at a two-month high. Over the past 30 days, it has remained persistently in “greed” territory, suggesting that if there’s anything investors fear now, it’s that they could miss out on a promising opportunity for significant profit.
