The potential approval of Bitcoin (BTC) Spot Exchange-Traded Funds (ETFs) seems to be already factored into the current pricing, as per Coinbase Institutional.
David Duong, head of institutional research at Coinbase Institutional, noted that the divergence in the performance of Bitcoin and other cryptocurrencies indicates an anticipation of one or more spot Bitcoin ETFs getting approved. He stated this in a Thursday report sent to subscribers.
Since traditional finance giants like BlackRock (NYSE: BLK) and others applied for spot-based BTC ETFs in mid-June, Bitcoin’s value has seen an 8% increase. At the same time, Ether, the second-largest cryptocurrency by market value, has lost 7.5%, according to CoinDesk data.
Bitcoin’s performance against the broader crypto market and its resilience to adverse macroeconomic development in the U.S. Treasury yield curve shows the role of ETF expectations in Bitcoin’s market behavior.
Duong commented on the complex relationship between crypto prices and the term structure of the U.S. Treasury yield curve, indicating different strengths of correlation for Bitcoin and Ether.
The approval of a spot-based Bitcoin ETF has been long-awaited by the crypto market, hoping to attract mainstream investment. NYDIG estimates that Bitcoin spot-based ETFs could generate $30 billion in new demand for Bitcoin.
However, Coinbase’s analysis suggests that Bitcoin may lose its edge over the broader market for a while once the spot-based ETF is approved, similar to events after the launch of futures-based ETFs in October 2021.
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