Benzinga - Economist and gold advocate Peter Schiff issued a pointed warning about the potential market reactions to an anticipated approval of Bitcoin (CRYPTO: BTC) exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC).
What Happened: He believes that this event will not follow the typical “buy the rumor, sell the news” strategy. Instead, Schiff warned, “It’s a ‘buy the rumor, sell the rumor of the news’ event.”
On X Schiff said, “Those who wait for the actual news to sell their Bitcoin may discover that there are very few speculators left to buy!”
As I warned, it's likely that the #BitcoinETF will not be a "buy the rumor, sell the news" event, but a "buy the rumor, sell the rumor of the news" event. Those who wait for the actually news to sell their #Bitcoin may discover that there are very few speculators left to buy!— Peter Schiff (@PeterSchiff) January 3, 2024
He expressed further concerns regarding the cryptocurrency market: “The island tops in GBTC, MSTR, and other Bitcoin and crypto-related securities look pretty ominous.” An “island top” is a chart pattern seen in trading where there’s a break in an asset’s price movement, leaving a block of trading data surrounded by gaps. It looks like a standalone “island” on the chart. This pattern is often seen as a warning that prices might start falling after having risen.
Schiff said that expectations for the actual approval of a Bitcoin ETF might set up investors for potential financial disappointment. "Speculators waiting for the actual approval of a Bitcoin ETF to sell risk giving back a lot of their paper gains, or worse watching those paper gains turn into realized losses."
The island tops in $GBTC, $MSTR, and other #Bitcoin and #crypto related securities look pretty ominous. Speculators waiting for the actual approval of a #BitcoinETF to sell risk giving back a lot of their paper gains, or worse watching those paper gains turn into realized losses.— Peter Schiff (@PeterSchiff) January 3, 2024
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Why It Matters: Schiff’s warning comes as Bitcoin plummeted from $45,000 to $40,000 in a short span on Wednesday. This plunge came after a report from Markus Thielen of Matrixport, suggesting a prospective rebuff of all spot Bitcoin ETF applications by the SEC, a reversal from the firm’s previous outlook which had predicted approval and a bullish surge to $50,000.
Meanwhile CNBC personality Jim Cramer’s change of heart towards Bitcoin, coinciding a day before the dive, despite his earlier skepticism in October.
Schiff has been a longstanding critic of the idea that a spot Bitcoin ETF would have a substantial effect on crypto adoption, dismissing it as merely simplifying speculative betting on the cryptocurrency’s price fluctuations.
Price Action: At the time of writing, BTC was trading at $43,161, down 4.61% on Wednesday, according to Benzinga Pro.
See Also: Wikimedia Commons
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