Buy on rumor, sell on news. Will Bitcoin experience a sharp decline after the launch of a spot Bitcoin ETF?

The venture capital firm Pantera believes that the arrival of a Bitcoin spot ETF does not necessarily mean that the market will see a crash, but rather it will kick off a bull market. They even shout out the slogan "Buy the Rumor, Buy the News."

Original Article

Buy the Rumor, Sell the News?

The investment adage "Buy the Rumor, Sell the News" has been applied in numerous cases, where investors buy based on anticipated events and sell when the actual news is released. When the anticipated event materializes and saturates the media, buyers exhaust their interest, causing prices to decline once all positive aspects have been priced in.

Is this similar to the recent anticipation of a spot ETF approval in the cryptocurrency space?

However, Pantera believes that the arrival of a Bitcoin spot ETF does not necessarily mean a market crash, but rather the beginning of a bull market. They even advocate for a new slogan: Buy the Rumor, Buy the News.

Pantera first revisited two classic "Sell the News" cases - the launch of Bitcoin futures on CME and Coinbase's public listing.

Bitcoin Futures on CME

On December 17, 2017, Bitcoin futures were launched on CME. While Bitcoin had surged by 2,448% since its 2016 halving, it entered a bear market with an 84% decline following the introduction of Bitcoin futures.

Coinbase Public Listing

Prior to Coinbase's listing, the market experienced a similar cycle where excitement over Coinbase's impending listing drove the cryptocurrency space. Bitcoin had surged by 848% since its 2020 halving, but a subsequent 76% bear market followed.

Buying Bitcoin

Pantera argues that these two major events did not necessarily benefit the actual ownership of Bitcoin by the masses.

The report indicates that Bitcoin futures did not attract significant new investor groups. They only appealed to a small number of arbitrageurs with minimal net buying volume.

While Coinbase attracted stockholders, it did not necessarily increase the public's access to Bitcoin.

Pantera explains:

The existence of Bitcoin futures is still a positive development for the future, attracting thousands of new traders who could not hold Bitcoin. Whether it's the recent launch of Bitcoin futures by CBOE or the CFTC's regulation of Bitcoin futures, it has taken a significant step towards Bitcoin's broader acceptance. However, we believe that a spot ETF will be a major advancement in the adoption of digital assets.

Pantera also points out the positive impact of the introduction of gold ETFs on gold prices.

In conclusion, Pantera states:

The launch of a Bitcoin spot ETF by BlackRock fundamentally changes Bitcoin's exposure and will have a significant positive impact. We also believe that many spot Bitcoin ETFs will be approved and will happen within one to two months, rather than years. Buy the Rumor, Buy the News.