This week is extremely important due to the Bitcoin spot ETF approval deadline. This week will end investors’ years of waiting to get a Bitcoin ETF approved by the US Securities and Exchange Commission (SEC). As a result of this crucial event, it could bring in volatility like never before.
Key events for this week
- Bitcoin ETF week: potential ETF approval by Wednesday or Thursday.
- US inflation data release on Thursday.
Read more: Bitcoin spot ETF approval could come as soon as Tuesday, new filings hint
US inflation data
On Thursday, the US Bureau of Labor Statistics will announce the inflation numbers for December. The headline inflation number was 3.1% for November, and forecasts currently sit at 3.2%, a slight increase.
If the actual inflation number is equal to or lower than the previous one, it could reinforce bets of Fed rate cuts earlier this year. On the other hand, if the inflation rate meets expectations, i.e., it comes in hotter than expected, it would further add to the Fed’s hawkish stance.
In such a case, the risk-on markets are likely to take a minor hit.
Potential Bitcoin spot ETF launch
The crypto market has been awaiting a potential Bitcoin spot ETF approval for years. Investors are excited this week as ETF approval is closer than ever before. With amended 19b-4 filings on January 5, the US SEC could announce its decision soon.
Analysts are expecting this decision to come out late Wednesday or Thursday as the big day when the SEC finally gives the green light to that long-awaited Bitcoin spot ETF.
Bloomberg’s Katie Greifeld noted that ETF issuers have until Monday at 8 AM ET to submit S-1s and that the SEC plans to vote on the 19b-4s and S-1s in the coming days. Greifeld added,
If both 19b-4s and S-1s are approved, ETFs could start trading as soon as the next day.
If it happens, all bets are off! Bitcoin price could blast off and potentially retest $50,000 or go higher. Additionally, the value of Bitcoin-related altcoins like Bitcoin Cash (BCH), Bitcoin SV (BSV), and Stacks (STX) could also increase.
Trading ETF news and hedging
Traders are likely to hedge their Bitcoin longs by shorting Ethereum or other altcoins. While some investors chase Bitcoin's skyward trajectory, others might see the ETF news as a signal to "sell the news" and exit their altcoin positions. This could trigger a temporary altcoin dip.
Read more: BlackRock might be on track to create history with $2 billion inflows in spot Bitcoin ETF in a week
(This story was corrected on January 8 at 10:40 GMT to say that US inflation data will be released by the US Bureau of Labor Statistics, not by the Federal Reserve. It was also corrected to say that markets expect US inflation to come in at 3.2%, not 3.3%.)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Week Ahead: Crypto market eyes a bullish turnaround Premium
A new week has begun, but crypto markets seem to be doing the same thing they have for the past few weeks – consolidate. However, this week will likely bring new opportunities as Bitcoin begins to show signs of revival.
Eigenpie announces EGP token airdrop for 100,000 centralized exchange users
Eigenpie is a SubDAO protocol, a multichain project that manages digital assets. The project focuses on staking Ethereum Liquid Staking Tokens (LSTs) like EIGEN and offers points to stakers.
SEC vs. Ripple lawsuit update: All related parties to file letters to seal motions and evidence
Ripple, SEC and any third parties are expected to file letters to seal proceedings and supporting evidence by Monday. Ripple CEO voiced concerns over the SEC’s treatment of the largest stablecoin, USD Tether.
Top AI tokens bleed despite reports of Apple closing deal to use OpenAI features
Apple has closed a deal with OpenAI to use the latter’s technology in its new iPhone, Bloomberg reports. The giant’s iOS 18 could come packed with ChatGPT features, per the report.
Bitcoin: Why BTC is close to a bottom
Bitcoin (BTC) price efforts of a recovery this week have been countered by selling pressure during the onset of the American session. However, the downside potential appears to have been capped.