Institutional Fervor, As ‘Smart Money Index’ Hits All-Time High Ahead of Crucial Bitcoin ETF Decision

Institutional investors and seasoned market participants are placing record-high bullish bets on the Chicago Mercantile Exchange (CME). Data from MacroMicro reveals that their bitcoin futures smart money index (SMI) skyrocketed to an all-time high of 13,711 last week.

SMI Hit New High

A recent data revealed by Taiwan-based data tracking website MacroMicro that the bitcoin futures smart money index, which tracks the spread between the large investors’ long and short positions open on the Chicago Mercantile Exchange. 

The smart money index rose to 13,711 last week, surpassing the previous peak of 13,603 to signal record net bullish positioning by asset managers and other reportables. This simply means that major players in the market are feeling extremely confident and positive.

Why the sudden confidence boost? 

Well, the SEC is getting ready to decide on a BTC spot ETF, and ‘smart money’ is making strategic moves before the big announcement. Meanwhile, many investors are using the CME’s 5 BTC cash-settled standard Bitcoin futures contracts as a way to be part of the Bitcoin action without dealing directly with the cryptocurrency.

Unveiling Spot ETF Narrative

However, the sharp rise in the smart money index during this quarter aligns with the growing narrative around the potential approval of a spot BTC ETF. Investors and institutions are positioning themselves ahead of the U.S. SEC’s deadline on January 10, where the regulatory body will decide whether to approve or reject an ETF directly tied to Bitcoin rather than futures linked to BTC.

This positive expectation has already pushed Bitcoin’s value up by a whopping 60% this quarter. However, some experts are warning that after the ETF is approved, there might be a ‘sell the news’ event, where prices could dip briefly.

Caution Amid High Expectations

Despite the excitement, some analysts are advising caution. QCP Capital’s market insights team suggests that after the ETF gets the green light, Bitcoin might face resistance around $45,000-$48,500, possibly sliding back to $36,000 before picking up again. 

Still, they remain optimistic, expecting a strong upward trend leading up to Bitcoin’s mining reward halving in April. Meanwhile, institutional investors are excited about Bitcoin’s future, especially with the upcoming ETF decision.