ETF and Ferrari help Bitcoin recover

Over the weekend, bitcoin climbed back up to around $28,000. There were two pieces of good news, one about ETF and one about Ferrari, although perhaps the rise was due to something else. 

The good news on ETFs

The first piece of good news actually came on Friday evening when it was confirmed that the SEC had dropped its appeal against the ruling in the Grayscale case. 

In fact, that ruling not only faulted the SEC for refusing to approve the conversion of the Grayscale Bitcoin Trust into an ETF, but actually ordered the agency to proceed with the approval. 

By dropping the appeal, the SEC has effectively accepted this ruling and it now seems almost a foregone conclusion that it will approve the application to convert GBTC into a spot bitcoin ETF. 

At this point, it is expected that it will also approve all other applications to issue spot bitcoin ETFs, including BlackRock’s. 

The first pressing deadline in this regard is 10 January 2024, which relates to the Ark Invest and 21Shares applications. 

As it is considered likely that the SEC will approve all applications for spot bitcoin ETFs at once, so as not to give anyone an advantage, it is expected that such approvals will be made by 10 January. 

The assumption is that the SEC will take as much time as it can, as it has always done in such cases, and that approval will then come in early January. 

Furthermore, 3 January is the 15th anniversary of the birth of Bitcoin, as the first blockchain block of BTC was mined by Satoshi Nakamoto on 3 January 2009.

The good news from Ferrari

The second piece of good news came the next day, Saturday, when Ferrari’s Chief Marketing and Commercial Officer, Enrico Galliera, announced that they had activated cryptocurrency payments. 

For now, this new payment method only affects US dealers, and not all of them yet, but in the future it should be extended to Europe as well. 

It will then be possible to buy a Ferrari by paying in BTC, ETH and USDC, thanks to a partnership with BitPay, which will convert the cryptocurrencies into fiat currency at the time of payment, allowing Ferrari dealers to accept dollars or euros. 

Galliera said the decision was made in response to explicit requests from dealers, as many wealthy customers wanted to pay in cryptocurrency. 

In particular, he was referring to young investors who have built their fortunes around cryptocurrencies, or traditional investors who use crypto to diversify their portfolios.

In this way, they can reach a new clientele who can use crypto to buy famous luxury cars.

Monday morning spike: ETFs and Ferrari Help Bitcoin Price?

However, if you look at the bitcoin price chart, you can see that the price did not rise on either Friday or Saturday. 

In other words, the two pieces of news mentioned above were unable to push the price of BTC higher, as it was around $26,800 on Thursday and remained close to that level practically until Sunday afternoon. 

The rise began on Sunday, when it first returned to $27,000 and then $27,200, and then jumped to $28,000 with a single spike early Monday morning. 

It should be noted that the traditional exchanges were closed over the weekend, and this morning’s move came as the Asian exchanges were open, and just as the Chinese exchanges were making a small but sharp downward move. 

There were two other pieces of news out of China yesterday which may have had more of an impact than the news on Friday and Saturday.

Good news from China: Bitcoin beats ETF and Ferrari news

Actually, there was no good news coming out of China, but rather bad news, which led some investors to believe that it could turn out to be good news for bitcoin. 

There are two related pieces of news as they both concern the possibility of QE from the Asian giant. 

The first was about China’s inflation rate, which turned out to be so low that even deflationary risks were likely. 

The second was a rumour that the Chinese government was planning to stimulate its economy. 

It was also reported that the Chinese government had already intervened in the financial markets to prevent the collapse of entire sectors in crisis, such as real estate or banking. 

Everything suggests that the solution to these problems could be QE, so it is possible that the Asian markets, and especially the Chinese markets, started buying BTC yesterday. 

Bitcoin is now the hedge par excellence against any excessively expansionary monetary policy by central banks, and its risk-on nature can allow for gains well above those of gold, for example. 

In this context, the rise in the price of BTC is not at all surprising, although it must be said that the current level is still well within the range around which it has been trading since March.