SEC Seeks New Ways to Reject Bitcoin ETFs, But Will They Succeed?
The U.S. Securities and Exchange Commission (SEC) is reportedly exploring fresh strategies to decline applications for Bitcoin exchange-traded funds (ETFs), based on a recent analysis from Germany’s Berenberg bank.
It is unclear what these new strategies might be, but they could make it even more difficult for Bitcoin ETFs to be approved. This could have a significant impact on the price of Bitcoin and the overall cryptocurrency market. Read on to know more.
New Developments Have Come About
Despite the recent legal victory achieved by Grayscale, which seemed to boost the prospects of SEC’s approval for spot Bitcoin ETFs, the SEC’s potential new stance could create significant challenges for the trajectory of the Bitcoin price. Despite a commendable 60% surge in value this year, Bitcoin (BTC) has struggled to breach the crucial $30,000 mark.
This struggle has escalated with a notable 9% decline in the past 30 days, raising concerns about a possible further decline by the year’s end.
The recent legal victory of Grayscale, however, has put the SEC in a position to reconsider its previous denial of converting the Grayscale Bitcoin Trust (GBTC) into an ETF. Although the court ruling doesn’t mandate immediate approval, it does exert pressure on the SEC to revisit its grounds for rejecting Grayscale’s application.
The SEC Has Been Forced to Reconsider!
Interestingly, the SEC might still retain the option to challenge the court’s decision. Despite this uncertainty, the market has witnessed a positive surge in stocks tied to cryptocurrencies post-Grayscale’s win. Notably, Coinbase, entangled in multiple legal battles, recorded a remarkable 14.9% gain, while MicroStrategy rallied by 10.8%. Berenberg’s analysis suggests that the potential inclusion of Coinbase in these ETFs could lead to the SEC modifying its arguments against the ETF applications.
For the Market, This Could Be Huge!
The approval of a spot ETF could wield transformative power over the cryptocurrency landscape by facilitating broader institutional access. This, in turn, could spur increased adoption and potentially draw participation from major industry players, often referred to as the “Big 4” companies. The ongoing regulatory tussle over crypto ETFs highlights the regulatory uncertainties that continue to impact the industry profoundly.
The SEC’s decision is a major setback for the cryptocurrency industry. Do you think it will have a negative impact on the price of Bitcoin?