Bitcoin’s steady performance has brought a sense of stability, causing a decline in options Implied Volatility metrics. Simultaneously, a stable market has fueled an increase in perpetual Open Interest, while leverage has been accumulating, hinting at a potential surge of volatility ahead.
Major Catalyst for Bitcoin
Catherine Wood, CEO of ARK Invest, expects the SEC to approve multiple Bitcoin ETFs simultaneously, a decision that seems imminent based on upcoming ETF rulings.
The US Securities and Exchange Commission (SEC) is facing a pending decision regarding ARK 21Shares’ ETF filing. Previous events have demonstrated the significant impact of ETF momentum on the market, as seen during the June rally following BlackRock’s ETF filing.
Speculation abounds about whether the SEC will approve, reject, or delay its decision. ARK’s application is likely to impact market volatility. However, current indicators suggest a potential delay, as the SEC’s attention is also divided amidst the Grayscale lawsuit.
Historically, the SEC has taken advantage of the full 240-day decision window. With the verdict for ARK 21Shares’ filing slated for release between August 11 and 13, an increase in market activity and volatility is expected.
ARK is not the only player in this game. The horizon is filled with more ETF deadlines, including Bitwise’s decision on September 1 and subsequent decisions on September 2. The market, already in a state of heightened anticipation, may experience heightened trading volume and price fluctuations due to these approaching rulings.
BTC Waits in Limbo
However, it’s not just the ETFs that are generating interest. Bitcoin’s current stability, resembling its behavior in the summer of 2020 and the upcoming halving, creates an ideal environment for accumulation. However, this calmness also carries its own risks, as increased leverage increases the potential for market liquidations.
For traders and investors, it’s a waiting game. BTC is experiencing occasional brief bursts of volatility and fluctuations in market volumes. Nevertheless, BTC remains tightly consolidated around the $29,000 level.
To wrap up with insights from industry expert David Rubenstein, Carlyle Group Co-Founder and Co-CEO, he remarked:
“Well, what has happened is people make fun of Bitcoin and other cryptocurrencies, but now the establishment of Larry Fink at BlackRock is saying they are going to have an ETF approved by the government. So you are saying, wait a second, the mighty BlackRock is willing to have an ETF in Bitcoin maybe Bitcoin is going to be around for a while.”
Bitcoin and the entire cryptocurrency sector are still facing significant challenges, with the SEC’s decision on the ETFs and overall regulations holding the greatest influence.
(Reference: BeInCrypto)