dailyhodl.com
Widely followed economist Alex Krüger is issuing a warning to traders about Bitcoin (BTC), saying that the crypto king could crash after the approval of a spot market exchange-traded fund (ETF).
In a lengthy thread, the analyst tells his 158,900 followers on the social media platform X that he believes the U.S. Securities and Exchange Commission (SEC) approving spot market BTC ETFs will be a sell-the-news event.
According to Krüger, the top crypto asset by market cap will see an immediate rise after the expected approval date in January but the rally will be met with profit-taking.
“Bitcoin ETF base case scenario:
#1 When: Jan 8th-Jan 10th
#2 Immediate reaction: up on approval (rationale: currently 90% priced-in)
#3 Follow-up: drop below pre-approval point into launch ~2 weeks later, cleaning up all late levered monkeys (rationale: market [is] very hot now, with altcoins funding in the 20-60%, and Bitcoin’s March futures annualized basis around 17-20%).
Note there is no official date for the launch, it could be days after approval, or much later, though given how many ETFs are in the race sooner rather than later makes more sense.”
The economist says that strong inflows after the launch of an ETF could help push BTC’s price up. However, if the inflows are weak or if the ETF bids get rejected, he says it could cause the flagship digital asset to plummet.
“#4 Post-launch: strong inflows/volume re-establish the upwards trend (or, if weak, send prices crashing, as front-runners need to dump into few bids). Be warned that if by chance the ETF gets rejected, prices will rapidly collapse. Good idea to have alerts on in January.”
Bitcoin is trading for $42,529 at time of writing, a marginal increase during the last day.
Generated Image: Midjourney