Crypto Degens Are Betting Millions on a Bitcoin ETF Being Approved

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Crypto analysts are increasingly convinced that a spot Bitcoin exchange-traded fund (ETF) will be approved this week amid a flurry of correspondence between the United States Securities and Exchange Commission (SEC) and hopeful ETF operators. And crypto gamblers are pushing more and more cash into bets on it actually happening.

Polymarket, a prediction market that accepts cryptocurrency payments, has taken in over $6.7 million worth of bets on whether a spot Bitcoin ETF will indeed be approved by January 15.

As of this writing, Polymarket users have collectively wagered that there is an 85% chance that the SEC approves any spot Bitcoin ETF by that date. It’s currently the largest prediction pool on Polymarket, ahead of one on who will be the Republican presidential nominee for 2024 in the United States. That prediction pool has some $5.9 million worth of wagers.

Companies have been trying to get a spot Bitcoin ETF approved in the United States for over a decade, but have been continually thwarted by an SEC that sees such vehicles as a way for customers to get scammed and fall victim to market manipulation. An ETF would let investors gain exposure to Bitcoin without actually owning and storing the cryptocurrency.

And they may be tempted to do so, given that Bitcoin’s value has surged by 168% over the past year to a current price above $46,000. While still down from its late 2021 high above $69,000, Bitcoin has rebounded substantially following the extended bear market, which saw the top cryptocurrency’s price bottom out near $15,000 following FTX’s collapse in 2022.

Crypto traders thought that the SEC had made its move on Tuesday, as the regulator’s official Twitter account said that spot Bitcoin ETFs had been approved. However, SEC Chair Gary Gensler quickly tweeted that the agency’s account had been “compromised” and that no such approval had been given just yet.

Bitcoin’s price quickly spiked after the fake news Tuesday, and then plunged. As of this writing, the price of Bitcoin is down about 2% on the day.

Despite the false alarm, analysts remain optimistic that approval will still come this week. Bloomberg ETF analyst Eric Balchunas tweeted Tuesday that he’s anticipating an approval announcement on Wednesday afternoon ahead of Thursday’s start of trading.

Edited by Ryan Ozawa.

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