On December 19th, Bitcoin broke through the psychological barrier of $43,000, sending the market skyrocketing to a local high of $43,456 after the day’s end.

Source: TradingView

Starting the week in a state of uncertainty, BTC/USD found its mojo: the candle on December 18th closed more than 5% above the daily low. Trader Matthew Hyland sees a ray of hope ahead, thanks to a jolly Bitcoin’s Relative Strength Index.

Source: X

Let’s dive into the hilarious chain of events that led to this joyous occasion.

SEC is waving the white flag, and BlackRock has a new trick up its sleeve

The SEC and companies are ironing out the details of a spot Bitcoin ETF structure as the deadline for ARK’s application looms on January 10th. Specifically, they’re deep in discussions about redemption models to finance this exchange-traded fund.

In-kind redemption structure, deemed more enticing by many firms, allows them to buy back shares using Bitcoins held by their ETFs. Cash redemption, seen by the SEC as the safer, more accessible payoff option, swaps those shares for their equivalent hard cash value. BlackRock’s ETF proposal now throws in cash redemption (a nod to the SEC) which might just up the fund’s chances for approval.

BlackRock, aiming to launch the first spot Bitcoin ETF in the US, just spiced up their product’s redemption policy by throwing BTC as an option. They’re one of the few firms agreeing to cough up cash until approval for in-kind redemption gets the green light.

Latest S1 submission from BlackRock to the US Securities and Exchange Commission claims that redeeming some or all of the shareholder’s shares in-kind for underlying Bitcoin, represented by redeemed shares, typically won’t trigger any tax apocalypse for the shareholder. 

Matt Hougan, Bitwise’s chief investment officer, emphasized in an interview with etf.com that the in-kind creation and redemption model is a fine example of cost efficiency, tracking, and tax benefits. From that standpoint, it’s better than the cash creation model, but hey, if all we can get is the cash value model, that’s still pretty sweet.

Doubled Bitcoin Predictions by Top Analysts

Long-term holders—or as we fondly call them, “hodlers,” those who hold onto their assets for at least a year without budging—haven’t started selling despite the short-term profit-taking, noted Anthony Rousseau, brokerage solutions head at TradeStation. That’s making the Bitcoin supply look tighter.

It’s possible we have the perfect storm brewing for a strong 2024, with the possibility of closing in on all-time highs by the end of 2024.

WOO Network – a crypto trading platform, in its year-end report, forecasts that historical highs might hit even sooner. The reasons they give are spot ETF listings and the upcoming halving of Bitcoin in April, which slashes new BTC issuance in half. All of this creates a sequential combination, if executed step by step, promising an ambitious target of $75,000 per BTC by early 2024.

In Conclusion

Bitcoin’s journey has hodlers holding their breath and hearts skipping a beat. Everyone’s trumpeting an unprecedented surge, yet the SEC holds the reins, its decision impacting a lot, unlike the halving which is a sure thing. Hats off to the financial wizards at BlackRock serving up solutions that can’t be ignored.

Only time will unveil where this rollercoaster ride leads. We’ll keep our finger on the pulse, updating you more frequently. Don’t change that channel!

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