Can Wall Street Tame Bitcoin Beast as ETF Nears Approval?

• Spot Bitcoin ETF approvals are expected.
• Anthony Pompliano warned Wall Street of the realities of trading BTC.
• Bitcoin has experienced extreme drawdowns, even in bull markets.

The anticipation of spot Bitcoin ETF approvals has mainstream investors excited, as crypto’s most sought-after prize is potentially within grasp. However, crypto entrepreneur Anthony Pompliano cautioned Wall Street that Bitcoin is unlike other tradable assets and can catch the unprepared off guard with extreme volatility.

Pomp Issues Warning on Bitcoin Volatility 

In a recent interview with CNBC, Pompliano stated that Wall Street’s pent-up excitement for spot Bitcoin ETFs should not cloud traders’ judgment on the realities of its extreme volatility, even during strong bull markets.   

While Bitcoin has outperformed other tradeable assets over the last 15 years since its inception, Pompliano cautioned that the outsized gains also came with strong moves to the downside, such as Wednesday’s 9% crash and the two 80% market drawdowns experienced since 2017. 

“If you're going to try and get levered long and think hey ETF gets approved, and the thing just goes to the moon, you're likely to get shaken out or get liquidated,” commented Pompliano.

Despite the cautionary warning, Pompliano remains confident that Bitcoin’s price will continue to appreciate over the long term, particularly as institutional capital pours into Bitcoin through ETF products.

ETFs Nearing Approval?

Rumors are reaching a fever pitch across crypto X that a flood of institutional money is poised and ready for ETF approval. YouTuber Crypto Rover speculated that the US Securities Exchange Commission (SEC) nod could come as soon as January 5 or as late as January 9. 

Trader Ash Crypto associated recent significant Tether token minting activity with an imminent ETF approval. Meanwhile, Bloomberg analyst Eric Balchunas commented , “This is def as close to “done” as we’ve been,” but did not give an expected announcement date.

On the Flipside

• Some argue that institutional money will smooth out Bitcoin volatility, nullifying Pompliano’s point.
• While an ETF approval seems imminent, the SEC has dashed Bitcoin ETF hopes before. Approval is expected but not guaranteed.
• Crypto purists maintain that institutional involvement goes against Bitcoin‘s ethos on sovereignty and decentralization.

Why This Matters

Approval of a spot ETF would be a significant milestone for the crypto industry, as it would signal Bitcoin’s induction into the mainstream. This would give early investors a strong sense of validation for their enduring belief in cryptocurrencies, even when the odds seemed stacked against the industry.

Read more about Grayscale’s latest Bitcoin ETF push here:
Grayscale Talks Bitcoin ETFs with JPMorgan and Goldman Sachs

Discover what some traders are saying about their experience using the MEXC platform here:
MEXC Faces Increasing Scam Claims of Forced Liquidation