The recent buzz surrounding Franklin Templeton’s filing for a Spot Exchange Trust Fund (ETF) has started to wane, echoing past experiences in the cryptocurrency market.
According to Santiment, a market intelligence platform, the Fear of Missing Out (FOMO) that initially gripped investors is no different from what we’ve seen in response to previous ETF filings.
🥳 Similar to previous crowd hype around #ETF news, the #FOMO surrounding #FranklinTempleton‘s filed ETF has died down quickly. ETF’s should benefit #crypto in the long term. But beware of initial overreactions when this kind of news first goes mainstream. https://t.co/kOyz37bQSS pic.twitter.com/Ki6fpWQnKd
— Santiment (@santimentfeed) September 13, 2023
Santiment recently cautioned crypto enthusiasts on X (formerly Twitter), suggesting that while ETFs hold long-term promise for the crypto market, it’s crucial not to get carried away with overreactions when news of ETF filings becomes mainstream.
Franklin Templeton entered the race for the first Bitcoin ETF approval by filing with the U.S. Securities and Exchange Commission (SEC) on September 12. This move aligns them with other financial heavyweights like BlackRock and Fidelity in seeking approval for a Bitcoin ETF.
The terms of Franklin Templeton’s filing closely resemble those of established players in traditional finance. Notable details include the requirement for Coinbase (COIN) to serve as the custodian for the ETF’s Bitcoin holdings.
The crypto market initially responded positively to Franklin Templeton’s filing, witnessing a surge in Bitcoin’s price. After hitting a local low of $24,920, Bitcoin rallied to $26,529, delivering a remarkable 6.45% profit in less than 24 hours—an impressive deviation from recent market trends.
However, this surge was short-lived, and Bitcoin’s price soon retraced, suggesting that the initial excitement generated by the ETF announcement might be fading. The bullish momentum subsided, causing Bitcoin’s price to settle within the range of $25,346 to $26,431.