$COIN & $RIOT will rally after Bitcoin ETF approved?
Let’s recap!
On Thu, 04 Jan 2024, I had a PICK post on bitcoin mining stock Mara (click here ! to read, help to repost - thanks!).
The time has come again to brooch the Bitcoin topic again.
This is because the internet is a buzzed with “rumours” that SEC is likely to give the go-head on 2nd week of January (week beginning 08 Jan 2024). (see below).
Media has highlighted that while SEC has been painted into a corner with Hobson’s choice on the approval, the regulatory body still have “limited” control, to process the “approvals” in batches instead of in one big swipe and approve all applications.
Que sera sera - whatever will be will be.
Who benefits from SEC’s approval?
If a Bitcoin Spot ETF were approved by the SEC today, several existing (a) ETFs, (b) US-listed mining stocks, and (c) crypto exchanges would stand to benefit immediately due to an anticipated increased investors’ interests, confidence and market sentiment.
ETFs:
(1) $Grayscale Bitcoin Trust (BTC)(GBTC)$.
It is the largest Bitcoin investment vehicle currently available.
GBTC trades at a premium to its net asset value (NAV) due to limited supply and its lack of ETF structure.
An approved Spot ETF could potentially narrow this premium, boosting GBTC's price.
This over-the-counter (OTC) ETF started at the bottom on 05 Jan 2023 at $8.45 per unit.
It “rose” on 29 Aug 2023 when they achieved a favorable outcome in their legal challenge against SEC’s rejection of their Bitcoin Spot ETF application.
After that, there was just no looking back especially when SEC decided against challenging / appealing the D.C. Circuit Court of Appeals’ verdict.
A stellar performance on “bitcoin” related front with a +340.83% gain over its past 12 months performance.
(2) $ProShares Bitcoin Strategy ETF(BITO)$:
The first US-listed futures-based Bitcoin ETF, BITO has seen strong trading volume since its launch.
A Spot ETF could attract new capital towards Bitcoin exposure, benefiting BITO indirectly.
(3) Other Bitcoin Exposure ETFs:
Various ETFs offer indirect exposure to Bitcoin through miners, blockchain companies, or thematic baskets.
These could see increased interest alongside a Spot ETF approval.
US-listed Mining Stocks:
(4) Marathon Digital Holdings (MARA):
A leading Bitcoin mining company, MARA's stock price is directly tied to Bitcoin's performance.
An increased connfidence in Bitcoin due to an ETF approval could drive up MARA's shares.
Conversely the reverse could be true (as well) given that this crypto-mining stock has already risen +571.87% for the past 12 months.
(5) $Riot Blockchain, Inc.(RIOT)$:
As the 2nd major Bitcoin miner, RIOT's stock is also highly correlated with Bitcoin's price.
An ETF approval could trigger a positive sentiment boost for RIOT.
Riot share price as of 04 Jan 2024
RIOT bottomed on 05 Jan 2022 at $4.22 per share.
Its past year performance has been an amazing +275.83% gain, comparable to semiconductor stock $NVIDIA Corp(NVDA)$, dispelling the “myth” that only tech stocks could excel.
(6) Other Mining Stocks:
Smaller publicly traded miners like $Hut 8 Mining Corp(HUT)$ and Core Scientific (CORZ) could also benefit from increased investor attention to the sector.
Crypto Exchanges:
(7) $Coinbase Global, Inc.(COIN)$:
As a leading US-based exchange with significant Bitcoin trading volume, Coinbase stands to gain from increased retail and institutional interest in Bitcoin following an ETF approval.
COIN bottomed on 05 Jan 2023 at $33.53 per share.
It closed on 04 Jan 2024 at $155.60 per share.
To date it has made a whooping +364.06% gain, also eclipsing Nvidia’s performance. Wow right!
(8) Gemini (GEMINI):
Another popular US exchange with a focus on security and compliance, Gemini could attract investors seeking a regulated platform for Bitcoin exposure.
(9) Kraken:
A major global exchange with strong institutional focus.
Kraken could benefit from increased demand for professional-grade Bitcoin trading services.
My viewpoints: (mine & mine alone)
I supposed the million-dollar question on everyone’s mind is - is it too late to get into the game now?
Only you have the answers by examining your (a) investment goal (short or long term) and (b) risk appetite.
You should only get into the game (1) with a clear objective and (2) eyes-wide opened.
Factors to help you make up your mind (hopefully).
Current climate:
(1) Recent rally:
Bitcoin and related investments have already seen a significant price increase especially from Q4 2023 onwards.
This implies the 2023 gains were potentially driven by anticipation of a Bitcoin Spot ETF approval.
(2) Increased volatility:
With such a big potential catalyst on the horizon, expect heightened volatility around the ETF decision and even after.
(3) Uncertainty remains:
The SEC could delay or even reject the ETF.
However, the probability is “low” given that the court found the SEC's decision "arbitrary and capricious", denting SEC’s reputation as a regulatory body.
Lest every investor forgets, Bitcoin peaked on 10 Nov 2021 at $68 692.14 per coin.
There were no real valid reasons for its death-crash to the $20,000 per coin average level except that its likely due to:
Profit taking.
US inflation gathering pace, culminating in the Fed’s first interest hike in March 2022.
Hawkish stance by US regulators like SEC.
Armed with above insights and investment gurus’ sentiments (Mr Warren Buffett & the late Mr Charlie Munger disbelieved in Bitcoin & crypto), do you know what to do next?
Must Read: Click on below titles to access. Give a like & help to repost ok. Thanks.
Do you think the SEC will approve the Bitcoin Spot ETF applications by the funds houses?
Do you think Bitcoin will rise up & beyond its previous peak of $68,692.14 per coin?
Please give a “LIKe” and “Re-post” ok. Thanks. Rating is very important (to me).
Do consider “Follow me” and get firsthand read of my daily new post/s ok. Thanks.
@Home22 @alylady @JunJie @J_endless @EssieC @Young8 @Janet39 @phtan78
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Would you consider "Follow me" and get first hand read of my Daily new posts? Thanks!). Tks!