Every time the price of Bitcoin starts to rise, as it’s been doing for the last few hours, there are always a number of questions, that all boil down to “What’s moving this?”
Very rarely is a big price move in Bitcoin clear, particularly if it’s going up. It might be the news, it might be something going on behind the scenes, or it might be a wealthy investor moving money around – usually there’s just no way to tell.
This time as the price climbs, the impending decision of the SEC on whether they will approve, reject, or just allow the Winklevoss ETF seems to be why everyone thinks Bitcoin is running up.
Personally, I’m not sure. In general, the sentiment seems to be pretty negative. Bitcoin is a new, risky asset. It has been linked to dark markets, money laundering, hacks, and scams throughout its short existence. Though it’s clear that there are legitimate uses, regulators are not likely going to want to go out on a limb – it would just be safer for them to give this ETF a pass.
With sentiment so poor, it doesn’t really make sense that the ETF is behind the current rally – even when you consider that the current Trump administration team is anti-regulation of all sorts, and even has a number of Bitcoin friendly people in it. No, it’s my feeling that a rejection is already priced in and that a pullback will be relatively modest and short when the news comes down.
Of course, I’m no expert and experienced traders, like Randy Hilarski posting on Steemit, are looking for ways to profit. Randy’s strategy is pretty straight forward:
- Hold Bitcoin Tightly Until March 11th.
- Leveraging Bitcoin Long at 3x-5X on Bitmex.*
- I will be Prepared to Short Big on the Morning EST of March 11th.
- Holding Altcoins Will Also Be a Decent Short Play But Will Fall in Tandem with BTC Initially.
Now, what really caught my eye about Randy’s article, though was this statement:
After years of hearing about the possibility of happening we will finally get an answer. I hope it gets a resounding, “NO” because the less government oversight we have in Bitcoin the better.
This kind of statement always makes me wonder a bit. Bitcoin is in its infancy, and will need to grow much, much bigger for it to be able to really threaten the dominance of national currencies and international banks. Along the way it will have to take interact with the system it’s designed to supplant.
For me, I say, bring on the ETF and the exposure it will provide to wealthy investors. Begin to suck some of that money and those investors out of the current markets and get them committed to the health and success of Bitcoin.
Soon you will hear a giant sucking sound as the legacy financial system gets hollowed out, and at that point the government regulations will become moot as people will be using Bitcoin without the need for Coinbase, BitPay, or Gemini.
We need these services as a kid needs training wheels when learning to ride a bike. When the time comes, those training wheels come off, and the kids rides off on his own.
So, although I won’t hold my breath for approval, neither will I dismiss it. I wish good luck to the Winklevoss brothers hope that the SEC regulators pay attention to the changing political winds.