The Bitcoin Exchange Trading Fund application filed by the Winkelvoss twins is nearing its decision date next month on March 11th. As traders are eagerly awaiting the SEC’s decision on whether Bitcoin will become an ETF, the market is showing quite a bit of excitement. Bitcoin’s price jumped over 6% in the past few hours peaking at $1047 on Bitstamp.
If Bitcoin becomes an ETF its price will undoubtedly skyrocket, as becoming an official traded security provides Bitcoin with the credibility that potential investors are looking for. One of the main reasons why people are still wary of cryptocurrencies, is because they do not feel that this “magic internet money” is tangible. At least you can see and feel gold and cash, but Bitcoin is in the cloud so to speak. With the approval of the SEC, those interested in Bitcoin will realize it is a legitimate asset that won’t suddenly disappear into thin air.
Another reason why Bitcoin won’t suddenly go ‘Poof!’ is because major banks are seeing it as a threat and are issuing “warnings” about it. Remember how the PBOC issued a warning on Bitcoin when it realized people are using unregulated exchanges and are possibly escaping capital controls or evading taxes? Well the Reserve Bank of India (RBI) is doing a similar thing by issuing an official warning about trading Bitcoin. The Press Release states:
The Reserve Bank of India advises that it has not given any licence / authorization to any entity / company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk.
The fact that banks are issuing such “warnings” means that they are seeing Bitcoin as a potential threat. “First they ignore you, then they laugh at you, then they fight you, then you win.” It seems that cryptocurrency is beginning its third stage, and it is only a matter of time before regulators come to an agreement. While traders might have expected the price to suffer quite a bit from another major bank issuing a bitcoin warning, India’s trading volume is nothing compared to that of China’s. As a result, the price remained unaffected as the bulls made their presence clear.
While most traders agree that the price will exhibit positive momentum if the decision is favorable, when that push happens is hard to predict. Chances are that most of the bull run will occur slightly before or after the decision date (March 11th). People will be buying coins in anticipation of the approval, and also to stack up on “cheap” coins prior to the decision. Make sure not to fall into a FOMO trap though, as those hurt the most.
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