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Wall Street jinx? Traders weight ‘sell the news’ potential after Bitcoin ETF launch

Wall Street opened its doorways for the first Bitcoin (BTC) exchange-traded fund (ETF) on Oct. 19, with the itemizing of ProShares Bitcoin Strategy (BITO) on the New York Stock Exchange. The fund attracted more than $1 billion in buying and selling quantity on its first day, whereas BTC value rallied to a brand new document excessive of $67,000.

But the spot positive factors didn’t keep for too lengthy with BTC paring some positive factors going into the weekend.

Bitcoin price corrected by nearly 11% from its all-time excessive to attain ranges beneath $60,000 on Saturday, elevating fears about selloffs that sometimes come after the launch of main crypto derivatives merchandise on Wall Street.

Analysts name for wider BTC correction

Nunya Bizniz, an unbiased market analyst on Twitter, recalled two of such main occasions: the itemizing of the first Bitcoin futures on the Chicago Mercantile Exchange (CME) and the debut of the crypto buying and selling service Coinbase’s inventory (COIN) on the Nasdaq inventory alternate.

Notable Wall Street listings coincided with spot Bitcoin value tops. Source: TradingView

Notably, CME launched its Bitcoin Futures product on Dec. 18, 2017, the date on which Bitcoin rallied towards its then-record high of around $20,000. But the launch additionally marked the starting of one in every of Bitcoin’s longest bear cycles, which bottomed around $3,200 twelve months later.

Similarly, the much-celebrated COIN’s debut on Wall Street on April 4, 2021, coincided with Bitcoin rallying to a brand new all-time excessive round $65,000 simply ten days later. Nonetheless, the upside transfer met a bout of sturdy selloffs, inflicting BTC to right to as little as $28,800.

As a consequence, the latest ProShares Bitcoin ETF left Bizniz and plenty of different analysts apprehensive about the so-called “buy the rumor, sell the news” correction. For occasion, analyst Lark Davis famous that he “wouldn’t be surprised” if the Bitcoin value crashes following the ProShares ETF launch identical to it did after the CME Bitcoin Futures launch.

Also, Dan Morehead, CEO and co-chief funding officer at Pantera Capital, wrote in a newsletter earlier this month that “he might want to take some chips off the table” forward of the Bitcoin ETF launch.

Impressive debut for Bitcoin ETF

Despite historic bearishness related to high-profile Wall Street crypto listings, some analysts imagine the Bitcoin ETF’s impressive debut would imply end in restricted draw back strikes in the spot BTC market.

Todd Rosenbluth, head of ETF and mutual fund analysis at CFRA, told the Financial Times that ProShare’s $1-billion debut is “a sign of the pent-up demand” amongst conventional finance firms wanting to rating a slice of the rising crypto business.

JPMorgan Chase added that retail merchants accounted for under 12-15% of internet inflows into BITO on the first two days of buying and selling.

Related: Bitcoin decides fate of $60K as weekly close keeps BTC traders on their toes

That pointed to a major curiosity in Bitcoin ETFs amongst establishments, with cash-marginated Bitcoin Futures open interest rising by up to 79% month-to-date and CME foundation going from adverse in July to above 16% earlier this week.

Bitcoin futures open curiosity throughout all exchanges. Source: ByBt.com

Noelle Acheson, head of market insights at crypto buying and selling agency Genesis, noted that Bitcoin’s perpetual futures rolling foundation, a metric to gauge the demand for leverage, ticked up however was nonetheless solely 13.08% in contrast to mid-April’s 34.6%.

High leverage stays a typical issue throughout latest spot BTC market corrections. In different phrases, the impartial funding charges at the second recommend that the likelihood of a giant pullback is comparatively low.

The views and opinions expressed right here are solely these of the creator and don’t essentially replicate the views of Cointelegraph.com. Every funding and buying and selling transfer includes threat, it is best to conduct your individual analysis when making a call.

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