How the Approval of Bitcoin ETF Affected the Whole Market

Good old days

Surely you've already seen dozens of pictures with a Bitcoin price chart and marked peaks on it after the network's halving. I won't dwell on the halving, as much has already been said about it. I'll just say that halving was always awaited more eagerly than the Olympics and the FIFA World Cup combined. All because it has usually been followed by price spikes, which cannot but excite the market.

Since Bitcoin is quite resistant to minor speculations or ordinary announcements and rumors, halvings and liquidity inflows have always served as the main drivers of the asset's price.

As for altcoins, it is worth understanding the following – not all altcoins are created equal. There are coins of networks and projects that can boast original architecture, interesting practical application, or decentralization of the familiar traditional functionality (like DEXes for instance). And here it should be noted that by investing in such a coin, you are essentially betting on the success of a particular idea behind it. However, the market is full of coins backed by fraudulent schemes, Ponzi, or nothing at all. Let's steer clear of such coins for now (trading them is a lottery, to say the least).

In the usual rhythm of our cozy crypto market, altcoins normally reacted more strongly to various market speculations, but overall still moved behind BTC and ETH, which have the greatest weight in the market. So, the market painted a clear picture - Bitcoin rises with liquidity influxes and halving, and everything else rises alongside it. Projects with solid ecosystems and strong support groups attract more funds and tend to outgrow their counterparts with less substance. However, we always knew that altcoins can exhibit greater volatility than their great ancestor – BTC. But all this was before exchange-traded funds on spot Bitcoin loomed on the horizon.

Wild, wild market

ETF frenzy began to stir the crypto sea with Bitcoin at the forefront even before the funds were approved. Take, for example, the story with the erroneous publication by the news outlet Cointelegraph on the social network X. At that time, the publication tweeted about the approval of ETF by the US Securities and Exchange Commission when it hadn't actually happened yet. On that day, the market reacted with a sharp pump.

In January 2024, the SEC finally approved a spot ETF on Bitcoin, and off it went. Since then, the crypto market, as they say, has been like a rollercoaster ride.

By letting American institutions (and, by the way, not just them, as recent data showed that the average purchase amount in BlackRock's exchange-traded fund is not such a large sum at $13,000) into the small world of crypto degens, we made it somewhat more akin to the traditional financial market. Firstly, the analysis of Bitcoin charts in the post-ETF era shows that the greatest price growth occurs during the settlement period before the opening of the American market. See, we're already reasoning as if we're sitting on Wall Street. Trading in the free crypto market never used to close, mind you.

But what's most interesting is that altcoins, including Ethereum, have ceased to correlate to such a degree with Bitcoin. BTC still holds a certain market sway, of course, as it still dominates. However, the percentage changes in the growth or decline of BTC and altcoins are basically on their own now.

What were we waiting for all this time?

One thing is clear: we are still trying to adjust to the new post-ETF reality for crypto. Adaptation is proving to be more difficult than we thought. Few analysts can now predict anything with reasonable accuracy. But, of course, all of this is temporary. Of course, we will learn to gauge investors' appetites, learn to read moods, remember those damn Mondays as market movement benchmarks.\

Of course, regulators will now closely monitor every coin and every exchange, since we've forced them to open the doors to crypto for big money. News about the banning of one coin or another in one country or another is increasingly popping up. Will the free spirit of crypto come to an end with the introduction of ETFs? Most likely, to a greater extent, yes.

Addresses are being marked, exchanges are closing, taxes are being paid. Some believe that the expected pumps of 2024 and 2025 will be among the last of such a scale, as big money will bring crypto a habit of moving at a measured pace. Let's hope they're wrong, or we've paid too high a price for the long-awaited ATHs.