All crypto investors’ attention is focused on January 10, when the first Spot Bitcoin ETF is expected to be approved. As usual, the excitement this has caused has seen prices recover across the sector, with no doubts about the bull sentiment leading up to the event. However, arguments have been raised as to whether this bullish sentiment would continue if a Spot ETF is ultimately approved, or whether it will ultimately become a ‘sell the news’ event.
What is a Sell The News event?
The phrase “sell the news” is popular in investing circles and is usually associated with a major event that ultimately moves prices. BlackRock and twelve other asset managers filing for Spot Bitcoin ETFs with the U.S. Securities and Exchange Commission (SEC) is an example of such a major event.
When the event is positive, it has a good impact on the assets in the sector, and in the case of crypto, the prices of Bitcoin and other cryptocurrencies start to rise. This usually stems from the anticipation surrounding the event and investors taking positions so as not to miss a big move. This is mainly because investors expect that the main event, such as the approval of a Spot Bitcoin ETF, would lead to further price increases.
However, this is not always the case for the market. There have been instances where during the main event prices dropped across the board. Such an event is called a “sell the news” event because prices are expected to fall as the euphoria reaches its peak.
The potential approval of a Spot Bitcoin ETF is seen by many in the industry as a ‘sell the news’ event since prices have already risen so much. However, not everyone believes this is the case as crypto experts start to intervene.
BTC price declines to $45,000 Source: BTCUSD on Tradingview.com
Discover Bitcoin ETF, not a sell-the-news event
One of the first crypto experts to share their thoughts on this is Andrew Kang. Kang explained at
Kang explains that a Spot Bitcoin ETF approval would result in all these asset managers trying to rake in between $10 billion and $20 billion in fees. They will also push for marketing, which Kang believes will make every dollar spent on marketing in 2024 even more important in 2025.
“When you think about the size of the opportunity, we shouldn’t be surprised if we see marketing and advertising spending on the scale of 2021’s bull frenzy,” Kang said. “If you consider the importance of timing for issuers, we might even go a step further. It will be a party.”
@ChainLinkGod also responds to Kang’s point and supports it gave their own understanding of how bullish an endorsement is. They explain that all asset managers who applied for Spot ETFs are inherently long Bitcoin.
“Yes, they technically don’t have any directional exposure, but all else being equal: 10x the price of bitcoin is 10x the annual management fee,” ChainLinkGod explains. They further add that any applicant will aim to become the dominant player as this means they can passively rake in billions of dollars in fees for years to come.
“All of this involves massive ad spend, paying out $BTC on every public appearance, and advising all their clients *this year* to gain exposure to $BTC through their ETF,” they explain. Given all this, a potential endorsement is more bullish than bearish for Bitcoin as the players battle for dominance.
Featured image from Investopedia, chart from Tradingview.com
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