We are on the cusp of a BTC Spot ETF approval and looking at what transpired in the last 24 hours, we find ourselves saying (as we so often do in crypto), ‘you can't make this sh*t up’.

The SEC’s Twitter account 'announced' that they granted approval for all BTC spot ETFs. Following the announcement, BTC ticked higher to 48k.

However, just minutes after the announcement, the same SEC account made a statement that they were hacked, and that no ETF has been approved yet. Not surprisingly, BTC traded back down to 45k.

The initial reaction to the 'approval' was muted with BTC being unable to trade out of the resistance area. We take this as a warning sign that an approval is mostly priced in and there may not be a huge rally post the approval.

The chances of an announcement tonight are high given Ark21's deadline expires today and the SEC has historically approved all ETFs at once.

We still look to ETH as a laggard play, and this seems to be validated by the performance of the ETHBTC cross following the fake announcement by the SEC. While the ETHBTC cross briefly broke the June 22 low, it quickly traded back above the 0.051 support.

The spot-futures basis spread still remains elevated, and one could sell the spread for a risk-free 12-17% ann (if held to maturity).

Options vols are also elevated now due to the ETF news event, and we expect vols to move lower and normalize once an ETF approval is out of the way. We see support at 40 - 42k, and resistance around 48.5k.

Selling 26 Jan 38k puts is still an attractive play with premiums at 23% ann. and risk reversals at -6.3% (puts more expensive than calls). Below 38k is also a decent level to go long in anticipation of the halving in April.