Exploring the Impact of Regulator’s Postponement on Bitcoin Price
Bitcoin price plunged 5% after regulators postponed approval of the first U.S. exchange-traded funds investing directly in the cryptocurrency, dampening investors’ hopes for a swift path to the world’s largest capital market.
Regulators Put a Hold on Bitcoin ETFs
The US Securities and Exchange Commission (SEC) recently released a series of documents stating the need for more time to consider seven bitcoin exchange-traded fund (ETF) applications, including one from BlackRock, the world’s largest asset manager. These delays have resulted in a 5% drop in the price of bitcoin, erasing the gains it made after a Washington court ruling in favor of asset manager Grayscale’s request to transform its flagship vehicle, Grayscale Bitcoin Trust, into an ETF.
SEC’s Reluctance towards Bitcoin ETFs
The SEC’s hesitation to approve bitcoin ETFs stems from concerns about market manipulation. While the SEC has previously approved bitcoin futures ETFs, which track the price of futures tied to the cryptocurrency, it remains cautious about directly offering consumers a spot bitcoin ETF. This hesitation is seen as an attempt to protect investors from potential fraud and the volatile nature of the cryptocurrency market.
Impact on Market Players
The postponement of bitcoin ETF approvals has had a significant impact on market players. Several firms, including Fidelity, WisdomTree, Invesco Galaxy, VanEck, Bitwise, and Valkyrie Digital Assets, have delayed their applications for spot bitcoin ETFs. However, the court ruling that forced the SEC to review its approach to bitcoin ETFs has provided a glimmer of hope for advocates of a spot bitcoin ETF.
The Role of Coinbase
Coinbase’s involvement in the ETF’s documentation further complicates the matter. While Coinbase has proposed surveillance sharing agreements with regulated exchanges hosting potential ETF listings, the SEC filed a lawsuit against Coinbase earlier this year, alleging violations of US securities laws. This conflict raises questions about Coinbase’s potential involvement in bitcoin ETFs and its impact on the SEC’s decisions.
Legal Implications and SEC’s Next Steps
With the court ruling favoring Grayscale and an increasing demand for spot bitcoin ETFs, the SEC is under pressure to reconsider its stance. The agency now has 45 days to decide whether to adhere to the court’s decision, request a court review, or file a direct appeal. While it is anticipated that the SEC will make its decisions on spot bitcoin ETFs in mid-October, analysts predict that the SEC may create alternative arguments to justify continued denials based on concerns specific to the spot bitcoin market.
Unique Insights into the Future of Bitcoin ETFs
While the current delay in approving bitcoin ETFs has caused a temporary setback, industry experts believe that the growing demand for such products will eventually push regulators to find a middle ground. Here are some unique insights into the future of bitcoin ETFs:
- Market Maturity: As the cryptocurrency market matures and becomes more regulated, regulators may become more confident in approving spot bitcoin ETFs. This will provide investors with a secure and regulated way to trade bitcoin without relying on unregulated cryptocurrency exchanges.
- Institutional Adoption: The increasing interest of institutional investors in cryptocurrencies, including bitcoin, will put additional pressure on regulators to approve ETFs. Institutional adoption brings credibility and stability to the market, which may alleviate concerns about market manipulation.
- International Precedents: Regulators can examine the approaches of other countries that have already approved bitcoin ETFs, such as Canada and Brazil. By learning from their experiences, US regulators can formulate a comprehensive framework for spot bitcoin ETFs.
Summary
The postponement of bitcoin ETF approvals by the US SEC has caused a 5% drop in bitcoin price and dampened investors’ hopes for rapid entry into the cryptocurrency market. The SEC’s concerns about market manipulation and the volatile nature of the cryptocurrency market have been key factors contributing to the delay. However, the recent court ruling and the growing demand for spot bitcoin ETFs may prompt the SEC to reconsider its stance. The involvement of Coinbase further complicates the matter, as the SEC continues to scrutinize the company’s compliance with regulatory requirements. Despite the setbacks, industry experts believe that the future of bitcoin ETFs is promising, with factors like market maturity, institutional adoption, and international precedents playing a vital role. As investors eagerly await the SEC’s decision, the global cryptocurrency community remains hopeful that regulators will strike a balance between consumer protection and the growing demand for bitcoin ETFs.
—————————————————-
| Article | Link |
|---|---|
| UK Artful Impressions | Premiere Etsy Store |
| Sponsored Content | View |
| 90’s Rock Band Review | View |
| Ted Lasso’s MacBook Guide | View |
| Nature’s Secret to More Energy | View |
| Ancient Recipe for Weight Loss | View |
| MacBook Air i3 vs i5 | View |
| You Need a VPN in 2023 – Liberty Shield | View |
Receive free updates on exchange-traded funds
We will send you a myFT Collection Daily e-mail with the list of the latest news Exchange-traded funds news every morning.
Bitcoin price plunged 5% after regulators postponed approval of the first U.S. exchange-traded funds investing directly in the cryptocurrency, dampening investors’ hopes for a swift path to the world’s largest capital market. world.
The US Securities and Exchange Commission said in a series of documents on Thursday that it needed more time to consider seven of them. bitcoins ETF applications, including that of BlackRock, the world’s largest asset manager.
The decline in the price of bitcoin means that the token has lost most of the gains it made after a Washington court this week ruled that the agency had been wrong to reject a request from the asset manager Grayscale to transform its flagship vehicle, Grayscale Bitcoin Trust, into an ETF.
The court ruling pressured the SEC to ease its decades-long policy of rejecting ETFs based directly on the controversial token. Cryptocurrency Advocates have long called for a spot bitcoin ETF, claiming it offers consumers a cheap and secure way to trade the coin, instead of buying it directly from unregulated cryptocurrency exchanges.
Demand for a spot bitcoin ETF has grown this year as more traditional traders have attempted to enter the sector. Fidelity, WisdomTree, Invesco Galaxy, VanEck, Bitwise and Valkyrie Digital Assets also delayed their applications for a spot bitcoin ETF on Thursday.
But the regulator argued that it could not offer investors assurances that the bitcoin market is not prone to being manipulated. Gary Gensler, chairman of the SEC, in July called the cryptocurrency market “full of fraud, full of hucksters”. Even so, the SEC has approved bitcoin futures ETFs, which track the price of futures tied to the cryptocurrency.
The Washington court forced the SEC to review its approach to bitcoin ETFs. You have 45 days to decide whether to stick with the court’s decision, ask a court to review it, or file a direct appeal. The SEC said it was “reviewing the court’s decision to determine next steps.” The regulator is expected to make its decisions on spot Bitcoin ETFs in mid-October.
“We believe it is quite feasible that the SEC will create alternative arguments to justify continued denials of applications for spot bitcoin ETFs based on concerns specific to the spot bitcoin market,” said Mark Palmer, an analyst at Berenberg Capital Markets.
He pointed out that Coinbase’s involvement in the ETF’s documentation further complicated the matter. Coinbase has proposed surveillance sharing agreements with regulated exchanges hosting potential ETF listings, CBOE Global Markets and Nasdaq. The regulator sued Coinbase earlier this year for allegedly violating US securities laws.
“We wouldn’t be surprised if [Coinbase’s] the potential involvement in those ETFs was to serve as part of the SEC’s reconfigured arguments to dismiss the claims,” Palmer added.
However, the lawyers suggest that a new set of rejections citing new concerns will challenge the SEC, which has long justified its opposition to these products on market manipulation grounds.
“Theoretically, they could try to oppose these requests for other reasons, but for years they have staked everything on the lack of a sufficiently regulated market for cryptocurrency trading, and the court has resoundingly rejected the SEC’s argument,” Jeremy said Senderowicz of the Vedder Price law firm.
—————————————————-