Wall Street welcomed the first Bitcoin (BTC), exchange-traded fund. (ETF) The listing of ProShares Bitcoin Strategy on the New York Stock Exchange (BITO) was the catalyst for Wall Street’s opening. On its first day, the fund saw more than $1 million in trading volume and BTC prices rose to an all-time high of $67,000.
However, spot gains didn’t last long as BTC lost some of its gains heading into the weekend.
The Bitcoin price fell by nearly 11% from its record high, reaching levels below $60,000 on Saturday. This raises concerns about potential selloffs that usually follow the launch of major crypto derivatives products.
Nalysts demand a wider correction of BTC
Independent market analyst Nunya Bizniz recalled two major events on Twitter: the listing of Bitcoin futures on Chicago Mercantile Exchange, (CME), and the debut of Coinbase’s stock on the Nasdaq stock Exchange (COIN).
Notable Wall Street listings were also coincident with spot Bitcoin price tops. Source: TradingView
CME’s Bitcoin Futures product was launched on December 18, 2017. This date marked the beginning of Bitcoin’s record-breaking rally to $20,000. However, the launch marked the start of one of the longest bear cycles in Bitcoin history, with a bottoming at $3,200 12 months later.
The much-anticipated COIN’s Wall Street debut on April 4, 2021 coincided with Bitcoin rising to an all-time high of $65,000 ten days later. However, BTC corrected to $28,800 after a series of strong selloffs.
Nooo, God. Please, no God! No! No! No! pic.twitter.com/ITKFBJqK6h
— Nunya Bizniz (@Pladizow) October 22, 2021
Bizniz, along with many other analysts, was worried about the “buy the rumor and sell the news” correction. Analyst Lark Davis, for instance, said that he wouldn’t be surprised if Bitcoin prices crashed following the ProShares ETF launch. This is similar to what happened after the CME Bitcoin Futures launch.
#bitcoin CME futures- Announced October 31, 2017. BTC rallies 224%. – Launched on December 18, 2017, the day BTC hit its 2017 high. It would not surprise me if the ETF launch went exactly as this. Epic buy the rumor, sell the news event pic.twitter.com/sKrmhdLxQv
Lark Davis (@TheCryptoLark), October 8, 2021
Pantera Capital CEO Dan Morehead wrote earlier this month in a newsletter that he may want to “take some chips off of the table” before the launch of the Bitcoin ETF.
Impressive debut for Bitcoin ETF
Analysts believe that the Bitcoin ETF’s remarkable debut will result in minimal downside movements in the spot BTC market, despite the historical bearishness of Wall Street crypto listings.
Todd Rosenbluth from CFRA’s ETF and mutual fund research said that ProShare’s $1 billion debut was “a sign of the potential demand” by traditional finance companies seeking to profit from the growing crypto industry.
JPMorgan Chase stated that retail traders accounted only for 12-15% net inflows to BITO during the first two trading days.
Related: Bitcoin decides the fate of $60K in weekly close to keep BTC traders on their toes
This indicated a substantial interest in Bitcoin ETFs by institutions. Cash-marginated Bitcoin Futures open interests rose by up to 79% month to date, and CME basis went from negative in July to over 16% earlier in the week.
Bitcoin futures are open to all exchanges. Source: ByBt.com
Noelle Acheson from Genesis’ market insights noted that Bitcoin’s perpetual basis rolling basis, which is used to gauge demand for leverage, has ticked up, but it was still only 13.08%, as compared to the mid-April 34.6%.
Spot BTC market corrections have seen high leverage remain a prevalent factor. The neutral funding rates currently suggest that there is a low chance of a major pullback.
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