In a surprising turn of events, Bitcoin (BTC) has quickly erased the gains it made following Grayscale Investment’s recent court victory against the United States Securities regulator. Just a day after the ruling, Bitcoin’s price surged to a two-week high, buoyed by the judge’s decision that the Securities and Exchange Commission (SEC) had acted “arbitrary and capricious” in rejecting Grayscale’s spot Bitcoin ETF application. However, the SEC’s subsequent delay of seven pending spot Bitcoin ETF applications has sent Bitcoin’s price tumbling, with a nearly 5% drop in the last 24 hours.
According to data from Cointelegraph Markets Pro, Bitcoin is currently trading around $26,000, experiencing a steep decline from the $27,300 level it had maintained since the Grayscale win. This setback is attributed to the SEC’s postponement of applications from major institutional players in the crypto industry, including BlackRock, WisdomTree, VanEck, Bitwise, Valkyrie, Fidelity, and a joint fund by Invesco and Galaxy. These delays took place on August 31, causing the sharp decline in Bitcoin’s price.
Interestingly, some experts had anticipated these delays. Bloomberg ETF analysts Eric Balchunas and James Seyffart were among those who predicted the postponements. Despite their expectations, the market decline still occurred, leading many to express their assessment of the current state of the market. Ben Simpson, for example, tweeted, “We’ve now fully retraced back to pre-SEC Grayscale Lawsuit Bitcoin price. Pretty much sums up where the markets are right now.”
The SEC’s decision to postpone the ETF applications provides the regulatory body with an additional 45 days to either approve, deny, or further delay the applications. The next decision deadlines for the ETFs are set for October 16 to October 19, but the SEC also has the option to delay the decision until around mid-March of next year. By that time, the SEC will be obligated to make a final determination.
Despite the recent decline in Bitcoin’s price, Balchunas remains optimistic about the likelihood of the SEC approving a spot Bitcoin ETF this year. He raised his probability estimate from 65% to 75%, citing Grayscale’s court victory as a significant factor. According to Balchunas, the judge’s rejection of the SEC’s arguments puts pressure on the regulatory body to provide valid justifications for any further denials as it faces impending deadlines.
As the crypto market continues to navigate regulatory hurdles, investors are left wondering about the optimal time to invest in Bitcoin. With the volatile nature of the market and ongoing regulatory developments, the question of when it will be “too late” to invest in Bitcoin remains unanswered. Experts in the industry emphasize the importance of protecting one’s crypto assets amidst market fluctuations, providing guidance on safeguarding investments.
In conclusion, the recent court victory for Grayscale Investment has been short-lived as Bitcoin quickly shed its gains following the SEC’s delay of several spot Bitcoin ETF applications. The market reaction highlights the impact of regulatory decisions on cryptocurrency prices and investor sentiment. As the SEC faces upcoming decision deadlines, the potential approval of a spot Bitcoin ETF remains a topic of speculation, with the recent court ruling adding to the pressure on the regulatory body. Amidst market volatility, investors are advised to prioritize protecting their crypto assets.
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