- The US SEC has delayed yet another series of spot BTC ETF applications, after Grayscale and Cathie Wood’s Ark Invest.
- BlackRock, Valkyrie, Fidelity, Bitwise, VanEck, WisdomTree, and Invesco have all received delay orders.
- Bitcoin price has reacted to the news with a 5% drop back to the $26,000 range.
- Meanwhile, Bitwise withdrew one of its ETH Futures applications.
Bitcoin (BTC) price has whiplashed all the ground covered during the August 29 rally when Grayscale asset manager’s news catalyzed an impulse to drive the market north. In the latest development, the market value of the giant crypto has dipped and the US Securities and Exchange Commission (SEC) takes blame.
Bitcoin price dips with spot BTC ETF delays
Bitcoin (BTC) price is down almost 7% in the last 24 hours, trading at the current price of $26,022. The dip comes after the US SEC delayed another series of deadlines for spot Bitcoin ETF filings.
BTC/USDT 1-day chart
The delay comes as investors and market observers anticipated a decision for spot BTC ETF applications on September 1. However, unsurprisingly, the financial regulator released delay orders for WisdomTree, Invesco, and Valkyrie. Other delay orders that have come in include Fidelity, VanEck, Bitwise, and BlackRock.
The delays mean that the SEC prefers to stack up the decisions for the next 45 day deadline, with the markets’ eyes now peeled for around October 15, with the likelihood of all 7 applicants getting a decision together. It is worth mentioning that this would be around the deadline for the SEC to respond to the Grayscale decision as regards whether to appeal or not. A paragraph in the previous announcement reads:
Still, the SEC has 45 days to appeal the ruling – in which case it would either go to the Supreme Court or an en banc panel review – or could still reject the application on other grounds.
Meanwhile, Bitwise has decided to pull back one of its Ethereum futures applications, in a move that according to experts, would enable them to convert their BITC product (a Bitcoin-linked ETF designed for long-term investors) to hold ETH futures as well as the BTC futures.
UPDATE: @BitwiseInvest withdrew one of their Eth Futures applications. This makes sense to me bc they’ll be able to convert $BITC to hold ETH Futures alongside BTC futures ~8 days before this ETF would’ve launched. It’d make little sense to have both https://t.co/umGSkIB7Wt
— James Seyffart (@JSeyff) August 31, 2023
Citing an excerpt in the withdrawal order:
The trust no longer intends to seek effectiveness of the fund and no securities of the fund were sold or will be sold..
Possible implication for Bitcoin price
After the drop Bitcoin price could find support at $25,036, providing the inflection point for the next uptrend. However, if this level fails to hold, BTC could move lower to the psychological $24,000. The Relative Strength Index is trying to repel the downside, evidence of bulls coming in. Similarly, the histogram bars of the Awesome Oscillator are edging toward the midline while flashing green, bolstering the case for the bulls.
BTC positions liquidated in the 7% slump
It is worth mentioning that the 7% dip liquidated $41.66 million long positions after their stop losses were triggered. On the other hand, only $7.31 million short positions were liquidated.
When an asset’s price drops, the leveraged positions of traders are forced to close because the margin is not enough to cover the loss. The exchange is therefore compelled to close the position automatically if the trader is unable to meet the margin call.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.