Bitcoin spot exchange-traded funds (ETFs) could see a significant boost in liquidity following the latest approval from the US Securities and Exchange Commission (SEC).
On October 18, the U.S. Securities and Exchange Commission (SEC) approved applications from the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE) to list long-awaited options on bitcoin spot exchange-traded funds (ETFs).
This will make options trading available for 11 approved Bitcoin ETF providers.
The approval could significantly boost Bitcoin ETF inflows, according to trading firm QCP Capital, which wrote in a research note on Oct. 19:
"The continued inflows into the ETF highlight that institutional demand remains strong. With the SEC's approval this morning of the BTC ETF options for listing on the NYSE, we believe this will provide the ETF with the necessary liquidity to attract sustained inflows."
Continued ETF inflows could help Bitcoin reach a new all-time high. ETFs accounted for about 75% of new cryptocurrency investment as of February 15, when they surpassed the $50,000 mark.
BTC/USD, annual chart.
Risk sentiment to rise ahead of US presidential election
The upcoming 2024 US presidential election could significantly increase investors' appetite for risky assets such as Bitcoin and other cryptocurrencies.
This will help risk assets stage a rally ahead of the elections, QCP Capital noted:
"With US equities near all-time highs and the Japanese yen on a fresh downward trend, risk sentiment will only intensify as the US election approaches. This will push risk assets higher and support our narrative for April."
Market participants are gearing up for Election Day in the United States in less than three weeks. Former President Donald Trump's chances of winning the presidential election rose to a record high of 60.2% on October 16.
To confirm a potential breakout from the current sideways trend, Bitcoin needs to be above $68,700, according to popular crypto analyst Rekt Capital.
The analyst wrote in a message to X on October 18:
"On the cusp of a confirmed breakout beyond the overhead resistance of the multi-month channel. Such a weekly close would be bullish."
BTC/USD, weekly chart
The potential breakout could be supported by positive ETF inflows this week. Bitcoin ETFs surpassed a record $20 billion in total net flows on October 17, within 10 months of launch.
By the way, it took gold ETFs almost five years to break the same $20 billion mark.
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