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Would approving a Bitcoin ETF lead to a decline in cryptocurrency prices?

The evaluation of the impact of regulatory approval for a Bitcoin ETF raises questions about its potential effect on cryptocurrency markets.

Despite prevailing optimism among experts and analysts about this development, there are some cautions that should be taken into consideration.

"Ran Neuner," the founder of "Crypto Banter," suggests that approval of exchange-traded funds (ETFs) could act as a "sell-the-news event," meaning it might be followed by a sharp and painful market correction in the medium term.

The market is telling you that the ETF approval will be a sell the news event for altcoins. The probability of approval is above 99% and altcoins are weak.

This is a clear signal that the ETF trade that has pumped the market for 203 days in now over. We will probably get a… pic.twitter.com/SqNBSLSKWr

— Ran Neuner (@cryptomanran) January 5, 2024

 "Neuner" cites the weakness of alternative digital currencies across the sector as evidence that the market anticipates this scenario.

He pointed out that the excitement generated by the announcement of "BlackRock" filing for a Bitcoin ETF may lose its momentum, potentially leading to a price correction of up to 20% in cryptocurrency markets.

This correction could significantly impact prices, such as a drop in the price of Bitcoin to around $35,000 and Ethereum to less than $1,800.

However, in the long term, the overall trend remains positive.

"Neuner" suggests that the expected correction may represent a transitional stage toward further increases in the cryptocurrency market, as the total value of cryptocurrency markets has increased by approximately 65% since the mentioned announcement.

"Arthur Hayes," the founder of "BitMEX," and financial analyst "Max Keiser," share these concerns, considering that Bitcoin ETFs may alter the nature of Bitcoin as a financial asset and negatively impact its unique value as an asset not dependent on intermediaries.

Both warn that this shift may lead to unexpected and undesirable consequences for the legal status and market value of Bitcoin.