ETF applications published in the official journal of the U.S. government give the SEC up to 240 days to approve or deny them.
Spot Bitcoin exchange-traded fund (ETF) applications from several firms have been published in the Federal Register, moving them one step along in the United States Securities and Exchange Commission’s (SEC) process.
According to records updated July 19, the Federal Register received notice of proposed rule changes allowing Bitcoin.
BTC $30,400 ETF applications from BlackRock, Fidelity, Invesco Galaxy, VanEck and WisdomTree. As a result of publishing the applications in the official journal of the U.S. government, the SEC has the opportunity to accept or reject the request, extend the time allowed or open comments to the public.
After the applications were filed in June, the Federal Register publication was expected. According to reports, the SEC considered the previous filings insufficient, so the exchanges amended their applications to name Coinbase as a surveillance-sharing partner.
Valkyrie will file a spot BTC ETF application on July 21 in addition to Bitwise’s. SEC has 45 days to make a decision, but the commission can extend the process to 240 days – until March 2024 – if necessary.
To date, the SEC has not approved a spot investment vehicle with direct exposure to cryptocurrencies like BTC but began allowing ETFs linked to BTC futures starting in 2021. In June, the Volatility Shares Trust launched a leveraged Bitcoin futures ETF, one of the first of its kind in the United States.
A federal court ruling suggesting the XRP $0.81 Token was not a security has brought scrutiny to the SEC amid Chair Gary Gensler’s continued policy of regulation through enforcement. Both Binance and Coinbase, among others, have been targets of lawsuits by the SEC in 2023.
Bitcoin ETF Approval Hard to Resist?
The rise in Spot Bitcoin ETF proposals has been a rather surprising development so far this year. Indeed, they have clearly signalled a change in perspective from traditional finance voices. However, the interest from these entities now ultimately relies on the US Securities and Exchange Commission (SEC), and whether or not they will approve their creation.
However, former SEC chair Jay Clayton says that a Bitcoin ETF approval would be “hard to resist.” Specifically, in a recent interview with CNBC, he discussed the progression that the industry has made, and why an ETF approval would be difficult to turn down.
“The fact that we have these institutions that know markets better than anybody and saying we’re going to put our reputation behind it, I find that pretty remarkable,” Clayton said. “What the institutions are arguing is that those distinctions have gone away, and now the spot product is less drag, more efficient for the investors,” he added.
Conversely, Clayton also noted that the regulatory process is thorough. Thus, he doesn’t expect an answer to be given in the short term. However, he did note that approval would need regulatory safeguards, which would depend on the continued establishment of such by the SEC.
Clayton is most known to the digital asset industry for initiating the 2020 lawsuit against Ripple. Moreover, that legal action is still ongoing and has become a massive point of contention between the industry and the regulator. However, since that point, Clayton has softened his stance on the industry. even taking an advisory position at Fireblocsk, a crypto firm.
Bitcoin price resistance at $32,000 has been holding strong
A recent market update released by Charles Edwards, founder of Capriole Investments, noted that Bitcoin has been unable to break through the $31,000-$32,000 resistance level.
“Bitcoin is trading into the most significant resistance on the chart, $32K. Despite a swath of positive news stories over the last month for the crypto industry; from the Blackrock ETF announcement, the XRP legal victory through to presidential candidate Kennedy stating he would back the US Dollar with Bitcoin today; nothing has helped Bitcoin sustain momentum above $31K.”
In addition, the report states that if this positive news does not translate into upward price momentum, it could be a bearish sign.
Bitcoin’s $29,500 support will hold? : Analysts question
The price of Bitcoin has not dropped below $30,000 for almost a month, but the lack of resistance below $29,500 suggests further downside is possible.
It is around $27,500 when the next major support levels for BTC/USD kick in, as Colin Talks Crypto has pointed out. Not only does this level act as support based on previous price action, but both the 200-week moving average (MA) and the 200-day MA have begun to converge just beneath it.
The price of Bitcoin/US Dollar has been consolidating within a narrow range for the previous month. Approximately $29,500 appears to be the level of support for this range. The market could move further downwards toward $27,500 if the daily close falls below support.
Volumes have declined, suggesting that perhaps the recent spike downward is less bearish than it appears. Market control could easily be taken by the bears if volume picks up amid another pullback.
There has been a decline in Bitcoin network fundamentals
As the Capriole Investments report points out, “price is only half the picture.” Fundamental factors also play a role. Metrics related to questions such as:
- What’s happening with on-chain flows?
- How are investors allocating capital?
- How does overall market sentiment and the macro environment impact Bitcoin?
- Is network security growing?
The Capriole Bitcoin Macro Index is an aggregate measurement of 40 fundamental Bitcoin variables, including on-chain, macroeconomic and equity market metrics. All factors have been combined into a single machine learning model.
The report concludes:
“The Macro Index today remains in a period of relative value (below zero), suggesting decent long-term value for multi-year horizon investors. However, the Index just re-entered contraction. On-chain and macro fundamentals have started to trend down following a 7-week period of recovery which started at $26K in early June.”
BlackRock Spot Bitcoin ETF a Game Changer?
Over the last month, Bitcoin ETFs have been the talk of the industry. Traditional finance firms, BlackRock and Fidelity, shocked the market with the announcement of their filed applications. Nevertheless, it has driven interest in Bitcoin and related entities. Coinbase has even benefited from its connection through Surveillance Sharing agreements with filing firms.
Now, one Bloomberg analyst has predicted that a BlackRock Spot Bitcoin ETF could bring in $30 trillion in capital. Moreover, Balchunas noted that approval could be massively important for the industry. Specifically, for the influx of funds that would come from investors not typically interested in digital assets.
“ETF is the format in which boomers and the financial advisors prefer their investments delivered in,” Balchunas told Cointelegraph. He expressed that its arrival could completely shift the spatial influx of the industry, and bring forth a new wave of optimists.
However, like many things in the US digital asset sector, the question of regulation stands in the balance. Specifically, whether or not the SEC will approve the first-ever Spot Bitcoin ETF in America. For Balchunas, the rise in flings is a good sign.
“They’re very smart, and they don’t just throw filings out willy-nilly,” he remarked. “They clearly see something out there that they think they can get through the regulators,” he added. Ultimately, the SEC could stand in the way of trillions of dollars in investments finding their way to crypto. A development that would undoubtedly be the very definition of a game changer.
Bitcoin’s long-term bull thesis continues
Despite these near-term bearish developments, there’s little reason to be concerned long-term. The next halving event is less than a year away, and positive news keeps flowing in.
Perhaps most importantly of all, the hash rate has risen by 50% in the last six months alone. This suggests that the Bitcoin network is stronger than ever and continuing to grow at a lightning-fast pace.
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