Economist and gold advocate Peter Schiff issued a pointed warning about the potential market reactions to an anticipated approval of Bitcoin BTC/USD 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!”
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."
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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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