The possible approval of a Bitcoin spot exchange-traded fund (ETF) suggests that this milestone will not automatically lead to a significant recovery in the crypto market. This emerges from an analysis by a crypto options trading platform.
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Cryptomarket is already prepared for approval
The expected approval decision for a Bitcoin (BTC) spot ETF has caught the attention of both the crypto industry and institutional investors. However, according to recent reports, the approval of a Bitcoin ETF will not necessarily lead to the massive surge in cryptocurrencies hoped for.
According to the analysis of options data by Greeks.life Current trends suggest that the approval of a Bitcoin ETF does not automatically result in huge buying pressure. This options data provides insight into how traders position themselves and their expectations of market movements following such a recommendation.
Market data suggests that low volatility was observed in key implied volatilities (IVs) and prices. Term IVs measure market expectations regarding future price movements in options contracts.
This emerges from a X contribution (formerly Twitter) from the trading platform Greeks.live. Despite speculation about the SEC’s approval of the Bitcoin Spot ETF next Tuesday, there appears to be little volatility in the near future.
There is news in the market that the SEC will pass the Bitcoin spot ETF application as early as next Tuesday, but there has been little fluctuation in the key term IVs and price.
Looking at the options data, Options IV fell on January 12th, which is highly correlated with the ETF… pic.twitter.com/f1B4ZPC05d— Greeks.live (@GreeksLive) December 31, 2023
Bitcoin mainly has holders
An important point is that the market has already partially priced in the possibility of ETF approval. This means that the positive news may already be priced into the current prices of Bitcoin (BTC) and other cryptocurrencies.
As a result, the impact of an actual approval could be lower as expectations have already been partially met.
Additionally, the options data suggests that some traders may be hedging (protecting) their positions. People defend themselves instead of aggressively taking new positions. This indicates a certain degree of caution on the part of investors. Even in light of positive news such as the approval of a Bitcoin ETF.
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