With the second biggest shorts liquidation since July, Bitcoin is on the verge of making explosive gains ahead of the expected approval of a Bitcoin ETF in October
Bitcoin (BTC), the world’s most liquid and valuable cryptocurrency, is advancing deeper in October with increased vigor ahead of a much-anticipated milestone.
With Bitcoin currently trading at $ 54,232, the cryptocurrency is nearing its April 2021 zenith. Additionally, a confluence of several technical and fundamental factors suggests this rally is far from running out of steam.
Yes, the SEC kicked off Bitcoin ETF approval BUT this is for those who are physically supported under the ’33 law. Law 40 term ETFs (which Genz loves) are alive and well and probably on schedule (we think a 75% chance were approved in October). Here are our chances: https://t.co/cSZ8aDsITl pic.twitter.com/DUEvRANvO7
– Eric Balchunas (@EricBalchunas) October 2, 2021
Namely, while the SEC is still dragging its feet to approve a physical Bitcoin ETF, the futures based Bitcoin Strategy ETF currently has a 2 to 1 chance of being approved on October 18. As a reminder, futures contracts are simply a contract between two parties to buy or sell a particular asset on a specified date and at a specific price. These contracts are traded on a commodity exchange such as the Chicago Mercantile Exchange (CME). Contracts are settled on expiry but are often renewed. Similarly, an ETF is simply a publicly traded investment vehicle – so it has a unique ticker symbol – that tracks the price of an asset or group of assets. Importantly, investors in an ETF do not own the underlying asset but still benefit from the price action in both directions, as an ETF can be sold short even if the underlying asset does not. can’t be. A Bitcoin ETF based on futures contracts would track the price of the underlying Bitcoin futures contracts which are, for example, traded on the CME.
So why is a Bitcoin ETF so important? Well, Bitcoin proponents have long called for a dedicated ETF, as it would expand Bitcoin’s reach and influence in the financial world, attracting a host of new investors who are currently intimidated by the complex process of acquiring crypto. currencies on unregulated exchanges. The ETF would also eliminate the need to securely store its stake in Bitcoin in order to gain exposure to the price performance of the cryptocurrency. Nonetheless, readers should note that a Bitcoin ETF based on futures contracts would not be able to accurately track the underlying price of the cryptocurrency, given the inherent structure of these derivatives.
On a related note, Soros Fund Management has now confirmed that it holds “a few pieces, but not a lot,” according to a Bloomberg interview with Dawn Fitzpatrick, CEO and chief investment officer of the company. This development once again hammers home the growing ubiquity of the crypto sphere among institutional investors.
#Bitcoins shorts are rekt.
Today is the second biggest short squeeze since July 25 with ~ $ 200 million in short closeouts.
As of July 25, however, we had ~ $ 758 million in short liquidations. pic.twitter.com/3zSQRjK7NH
– AndrÃ© Dragosch (@Andre_Dragosch) October 6, 2021
Technically, Bitcoin experienced the second largest shorts selloff since July on October 6, amounting to at least $ 200 million. This liquidation amount was not exceeded until July when short positions worth $ 758 million were liquidated.
Additionally, the Bitcoin Long / Short ratio, which currently stands at 1.08, suggests that there is a definite bullish bias regarding the outlook for the cryptocurrency.
On a slightly disturbing note though, the Crypto Fear and Greed Index is approaching overbought territory with a value of 76. This means that the current rally in the larger crypto sphere could become more susceptible to external shocks.