Bitcoin, which rose after Grayscale won its SEC case, has fallen to its lowest point since March as the market awaits an ETF decision.
Bitcoin (BTC) is not keeping up with the bulls as it fell 1% in 24 hours, crashing below the $25,700 mark. The price is some distance from last week when Bitcoin crossed the $28,000 level after a US Court of Appealsย took Grayscaleโs sideย in its court battle with the United States Securities and Exchange Commission (SEC) regarding the investment managerโs intention to convert its GBTC Trust into a spot Bitcoin ETF.
Following the courtโs position, Bitcoin surged. However, the SEC still delayed deciding on a Bitcoin ETF. This dampened Bitcoin sentiments and likely caused BTC to plunge. At $25,000, Bitcoin is at its lowest point in about 6 months, since the middle of March.
Last week, the courtย accusedย the SEC of its inability to properly explain its approval of two BTC futures exchange-traded products (ETPs) but not Grayscaleโs proposal. The courtย said:
โIn the absence of a coherent explanation, this unlike regulatory treatment of like products is unlawful. We therefore grant Grayscaleโs petition for review and vacate the Commissionโs order.โ
Currently, the market is waiting for the SECโs decision on a spot Bitcoin ETF. The SEC has delayed making a pronouncement on about seven ETF proposals, including those from Bitwise, WisdomTree, Valkyrie, VanEck, and giant asset manager BlackRock. Following its delay on August 31, the SEC extended its decision by 45 days until October 17. By then, the Commission would have to approve, deny, or decide on a further delay.
Possibility for SEC Approval of Bitcoin ETF
The SEC has yet to approve any proposal for a spot Bitcoin ETF since the first one was submitted by the Winklevoss brothers in 2013. Each time, the Commission cited several problems, including investor protection and market manipulation.ย
Regardless of the SECโs delay, the market is anticipating approval.ย According to Bloomberg ETF analystsย Eric Balchunas and James Seyffart, there is a 75% chance that the SEC would approve a spot Bitcoin ETF by the end of the year. The analysts are bullish on the possibility of an approval because of Grayscaleโs recent victory. According to Balchunas in a recentย post, the two analysts decided to increase their previous 65% odds of a launch to 75% by the end of the year and 95% by the end of next year. Balchunas says the courtโs ruling was โbeyond expectations and leaves the SEC with very little wiggle roomโ.ย
JPMorganย (NYSE: JPM) analysts believe that the SEC is likely to approve a spot BTC ETF following the court ruling. The financial giant believes that the only way for the SEC to maintain its stance against Grayscaleโs ETF is to โretroactively withdraw its previous approvals of futures-based Bitcoin ETFs.โ However, a decision like that would be harmful to the crypto industry and also to the SEC.
However, the JPMorgan analysts do not believe an approval will have a significant effect. The companyโs report notes that spot Bitcoin ETFs outside the US have not done much for crypto and have not brought the kind of investor interest expected by enthusiasts.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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