All the attention of crypto investors has turned to January 10, when the first Spot Bitcoin ETF is expected to be approved. As usual, the enthusiasm triggered by this saw prices rally across the space, no doubt about the bullish sentiment leading up to the event. However, debates have arisen as to whether this bullish sentiment would persist if a Spot ETF was ultimately approved or whether it would end up being a “sell news” event.
What is a Sell the News event?
The phrase “selling the news” is popular in investing circles and is usually associated with a major event that ultimately moves prices. An example of such a major event is BlackRock and 12 other asset managers filing for a Spot Bitcoin ETF with the U.S. Securities and Exchange Commission (SEC).
When the event is positive, it has a positive impact on the sector’s assets and, in the case of cryptocurrencies, the prices of Bitcoin and other cryptocurrencies begin to rise. This usually comes from anticipation surrounding the event and investors taking a position so as not to miss a major move. This is mainly because investors expect the main event, such as the approval of a Spot Bitcoin ETF, to trigger further price increases.
However, this is not always the case for the market. There have been instances where the main event saw prices drop across the board. Such an instance is referred to as a “news sell” event, as prices are expected to fall as the euphoria peaks.
The potential approval of a Spot Bitcoin ETF was seen as a “news sell” event by many in the space, given that prices have already risen significantly. However, not everyone believes this to be the case, as crypto experts are starting to weigh in.
BTC price declines to $45,000 Source: BTCUSD on Tradingview.com
Spot Bitcoin ETF is not a news sales event
One of the first crypto experts to share his thoughts on this topic is Andrew Kang. Kang took to
Kang explains that a Spot Bitcoin ETF approval would see all of these asset managers trying to collect between $10 billion and $20 billion in fees. They will also push for marketing, which Kang says every dollar spent on marketing in 2024 will become even more important in 2025.
“When we think about the scale of the opportunity, it shouldn’t surprise us to see marketing/advertising spending on the scale of the 2021 bull craze,” Kang said. “When we consider the importance of timing for issuers, perhaps we go even further. This is going to be a godsend.
@ChainLinkGod also responds to Kang’s point and supports it. gave their own idea of the optimistic nature of an approval. They explain that all of the asset managers who have filed for a Spot ETF are inherently long Bitcoin.
“Yes, technically they have no directional exposure, but all things being equal, 10x the price of bitcoin equals 10x the annual management fee,” ChainLinkGod explains. They further add that each candidate will seek to become the dominant player, because that means they can passively reap billions of dollars in fees for years.
“All of this involves massive advertising spending, spending $BTC on every public appearance and advising their entire clientele *this year* to gain exposure to $BTC via their ETF,” they explain. Given this, potential approval is more bullish than bearish for Bitcoin as players vie for dominance.
Featured image from Investopedia, chart from Tradingview.com
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold investments and, naturally, investing involves risks. You are advised to carry out your own research before making any investment decision. Use the information provided on this website entirely at your own risk.