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The week ahead is one of the most highly anticipated in cryptocurrency history: the week the U.S. could finally green light a spot bitcoin exchange traded fund. Momentum around a decision next week when the Securities and Exchange Commission is expected to approve or deny the Ark 21 Shares Bitcoin Trust has been building, sending bitcoin 60% higher over the past three months. The SEC is widely expected to approve several spot bitcoin ETF applications at the same time, if it approves any at all, to even the competitive playing field. There are 13 companies waiting in line, including BlackRock, Invesco, Fidelity, Grayscale, Ark, Bitwise and VanEck. Quite Epic "It really is quite epic," said Noelle Acheson, economist and author of the "Crypto is Macro Now" newsletter. "Just a few months ago, most people that I knew were saying it's not going to happen now it looks like it actually will." "Of course, it's not a done deal," she added. "We can't say [with 100% certainty] that we're going to get it next week, but it would be a really, really aggressive move from the SEC were they to pull the rug." The bitcoin rally faltered this week even as anticipation mounted. But enthusiasm isn't about the ETF approval per se, investors say. It's about the flow of money into the ETFs once they're on the market. "The sustainability of this rally rests on market appreciation resulting from the potential for new assets to enter the cryptocurrency system from the pending launch of spot Bitcoin ETFs," Kenneth Worthington, an analyst at JPMorgan, said in a note this week. "We are keen to see the impact of this decision as it will be a key test to the durability and resiliency of the cryptocurrency markets." Bull case The bull case rests on regulated bitcoin ETFs bringing a wave of new institutional demand to bitcoin at the same time as supply shrinks next spring when another Bitcoin halving is scheduled, lowering incentives for bitcoin miners and potentially sending the price rocketing. But if an ETF gets approved this week, that won't necessarily mean investors jump in on day one. "The fund flows are an important signal to the market," said Oppenheimer's Owen Lau. "If the initial flow is not as strong as expected, there could be downward pressure on the bitcoin price. But if the flow is better than expected, the upward momentum will likely continue and test new recent highs." It's also possible the appetite for a bitcoin ETF has been exaggerated. Some on Wall Street are concerned that flows of money into bitcoin ETFs will merely be capital exiting existing bitcoin products (such as bitcoin futures ETFs) and that an ETF approval alone may not make a difference to those investors who remain uninterested in crypto. Bitwise, one of the asset managers waiting for a decision on a bitcoin ETF application, released a survey this week showing just 39% of financial advisors expect to see an ETF come to market this year, although 88% see its potential approval as a key catalyst. Possible disappointment Acheson said the initial market reaction next week may prove disappointing. "[My] gut feeling is we're probably overestimating the day one impact [but] underestimating the medium- and longer-term impact [of the] educational value of the investment advisors, and the BlackRock, Invesco, Fidelity marketing teams, gearing up to educate the mainstream public about the advantages" of crypto, she said. Tyrone Ross, a financial advisor and CEO of Onramp Invest, goes further still, expecting the first reaction to be "a dud." But, like Acheson, he believes events may become more interesting "in the medium to long term" as financial advisors grow more educated in crypto as an asset class, and crypto regulation becomes clearer. Even so, investors may still benefit from an SEC approval, regardless of the immediate success of any particular ETFs. "The rally was initially driven by anticipation of the launch of cryptocurrency spot ETFs, and in particular Bitcoin Spot ETFs," Worthington at JPMorgansaid. "The persistence of elevated activity, volumes, and prices could further support the rally even if bitcoin ETFs fall short of expectations." CNBC's Michael Bloom contributed reporting.

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Investors await a landmark decision on a bitcoin ETF in the week ahead. Here's what to expect - CNBC