Research Summary
The report discusses the expected approval of an ETF and its potential impact on the market. The author suggests that the market may react negatively to the news, contrary to previous expectations. The report also explores different scenarios that could influence the author’s position on the ETF trade.
Key Takeaways
ETF Approval and Market Reaction
- Change in Market Prediction: The author initially believed that the ETF approval would lead to a market surge. However, after observing the current market state, the author now predicts a “sell the news” reaction, where investors sell their holdings upon hearing the news.
- High APR on Altcoins: The author notes that many people are paying more than 50% APR to long altcoins, with most altcoins around 80 – 100% APR. This could be a contributing factor to the predicted market reaction.
Scenarios Influencing ETF Trade Position
- Close Proximity of ETF Launch and Approval: If the ETF launches shortly after its approval, the author suggests that this could change the time horizon of the trade, leading to a buy-back.
- Post-Launch Market Pump: The author believes that if the market pumps and sustains it for a few days after the ETF launch, it could indicate a bullish ETF, leading to a potential change in position.
- Pre-ETF Market Crash: A significant drop in BTC value before the ETF approval could lead to a “sell the pre-news” scenario, allowing investors to buy the dip.
Market Read and Portfolio Allocation
- Market Read: The author suggests that the ETF approval is a significant event that has investors on edge. A bullish ETF approval could send the market soaring.
- Portfolio Allocation: The author is already allocated spot-long and is okay with missing out on a few pumps on the trading side.
Actionable Insights
- Monitor ETF Approval and Launch Dates: The proximity of the ETF approval and launch dates could significantly impact the market. Investors should keep a close eye on these dates and adjust their strategies accordingly.
- Observe Market Reaction Post-ETF Launch: The market’s reaction after the ETF launch could provide valuable insights into the ETF’s bullish or bearish nature. Investors should monitor this closely to make informed decisions.
- Consider Pre-ETF Market Conditions: A significant drop in BTC value before the ETF approval could present a buying opportunity. Investors should be prepared for such scenarios.
