Bitcoin Futures ETF Sparks Upwards Price Jump as Fear Grows around Inflation – Weekly Roundup

Fueled by fear of inflation, ETF’s, and rising debt ceilings, Bitcoin and the broader digital assets markets saw yet another impressive run this past week.  The following is a closer look at a few of these events.

Bitcoin Futures ETF

We’ve talked about the potential for a Bitcoin Futures ETF on various occasions, and with the amount of active applications for such a product, will continue to do so for the foreseeable future.

Heading in to the weekend, an article released by Bloomberg has fed the bulls with multiple insiders claiming the SEC will not oppose multiple futures based Bitcoin ETFs set to launch in the coming days.  By not opposing ETF applications from both Invesco and ProShares, these funds will automatically go live on their scheduled dates early next week.

It is important to note that while this is a big step forward for Bitcoin, the funds expected to launch do not allow investors to gain direct exposure to BTC.  Rather, these are ETFs based on Bitcoin futures contracts.  Many are viewing this as the SEC ‘dipping their toes’ in the water, and barring no major issues, a precursor to the eventual launch of a true Bitcoin ETF.

Further fueling this speculation was a timely tweet sent out by a branch of the SEC itself, warning investors of the associated risks.

Debt Ceilings & Inflation

Although its track-record as a hedge has not always been the greatest, it appears as though an increasing amount of investors are viewing Bitcoin as a safe-harbor against the actions of ‘spend-happy’ governments.  This past week saw numbers surrounding inflation and debt ceilings strike fear in to many for what the future holds – no doubt playing a role in the steady rise in BTC prices.

With regards to annual inflation rates, the United States just posted a 13 year high.  Coming in at 5.4%, this continual uptrend is being fueled by increasing costs of shelter, food, energy, and more.  Many attribute this to the trillions of dollars minted in the name of stimulus packages over the course of the pandemic.

If inflation running rampant isn’t worrisome enough, decisions to raise the debt ceiling in the United States yet again has many speaking out – Senators included.  In a recent speech, Senator Cynthia Lummis shared her disdain for such a decision, stating,

“One of the reasons that I became so interested in digital currencies, in non-fiat currencies, is because they’re not issued by a government.  Bitcoin is not issued by a government.  So it is not beholden to the debts that are run up by governments.”

“Time and again, Presidents of both parties have run up the debt, irresponsibly, with no plan to address it. So thank God for Bitcoin, and another non-fiat currencies that transcends the irresponsibility of governments – including our own.”

The bottom-line is, people are losing faith in FIAT currencies around the globe.  Governments continue to ‘kick the can down the road’, raising debt-ceilings, so that they can continue spending unabated, with repayment being a responsibility for future generations.

In such times, many will search out for a means of protecting their wealth.  In today’s modern-age, Bitcoin increasingly fits the bill in the eyes of many.

Market Reaction

So how has the market reacted to the pending launch of multiple Bitcoin ETFs and murky outlook surrounding FIAT? In a wildly positive manner.

In the hours following reports of an ETF approval circulating on the 14th, BTC rapidly approached – and briefly surpassed – the $60,000 marker.

Interestingly, when looking at the popular Bitcoin ‘Fear and Greed Index’, it would appear as though this uptrend has plenty of life left in it.

With bull-markets traditionally reversing in the mid-90’s, an index marker of 71 hopefully points to an exciting and fruitful few months ahead before a strong period of consolidation occurs.