As with the stock market, the crypto market spent much of 2023’s end rallying strongly. 

Similarly, as we’ve moved into this new year, stocks and cryptos have behaved in much the same way. And after a red-hot rally, both are now taking a healthy breather.

But we’re confident the consolidation won’t last long. Plus, this most recent bout of volatility comes along with a potential Bitcoin exchange-traded fund (ETF) approval on deck for next week.

And long-term, that is great news for crypto investors.

Unlocking a New Wave of Crypto Profits

So far, the bulk of the world’s “investable” money has been restricted from the crypto markets. That’s because it’s held by major financial institutions. And most of those institutions have rules limiting their ability to deposit customer funds directly into cryptos.

But a Bitcoin ETF would essentially allow those major firms to bypass those laws and invest in cryptos with customer funds via an exchange-traded fund.

In short, the SEC has received 13 spot Bitcoin ETF applications. The window to approve those applications opened on Friday, Jan. 5, and will close Wednesday, Jan. 10. Most market watchers believe the SEC will announce its decision on Monday, Tuesday, or Wednesday. 

And if one or multiple Bitcoin ETFs get approved next week – it would catalyze a new flow of money into the crypto markets. And we’re talking about a lot of money.

Consider this: Financial firm VanEck estimates about $300 million would flow into Bitcoin ETFs in the first few days of trading. Within a quarter, it expects that number to more than double to $750 million. Within two years, inflows will likely balloon to over $40 billion as Bitcoin ETFs take significant market share from gold ETFs, according to VanEck. 

Therefore, the long-term implications of a Bitcoin ETF approval next week are exceedingly positive.

But beware the short-term implications.

The Final Word

Traders have front-run this approval. Many are sitting on some pretty big profits already. And they’ll likely do some profit-taking afterward.

Our technical analysis seems to confirm that Bitcoin is due for some short-term consolidation ahead of and immediately after next week’s potential approval. 

It is also our belief that this pullback will present a great buying opportunity. 

Now just add that to the list of ways that cryptos have been mirroring the stock market lately.

Like most cryptos, stocks have also kicked off this new year on rocky footing, to say the least. But that’s because they’re coming off of the fast-and-furious rally that closed out 2023. It’s only natural that they take a breather here before taking their next leg higher.

And we think that will happen quite soon. According to our analysis, it’s very likely that stocks will carve out a bottom and resume their climb higher within the next few weeks. 

That means you’ll need to be ready to pounce on the buying opportunities that emerge. But which stocks should have your priority?

Find out our favorite stocks to buy now for strong gains in 2024.

_{On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.}