Bitcoin, Ethereum, and other leading cryptocurrencies are gearing up for a potentially significant month. Despite a recent dip in Bitcoin’s value, possibly influenced by events in China, other major cryptocurrencies like Ethereum and XRP have also declined, especially after an anticipated market disruptor didn’t come to fruition. Former U.S. Securities and Exchange Commission (SEC) chair Jay Clayton has indicated that the approval of a Bitcoin spot exchange-traded fund (ETF) is likely.
He emphasized to CNBC that Bitcoin is not a security and is a sought-after asset by both retail and institutional investors. Clayton believes that the distinction between futures and cash products won’t last indefinitely. In 2021, the SEC gave the green light to a Bitcoin futures ETF, with the crypto market’s value reaching around $3 trillion at its peak.
Recently, the SEC postponed its decision on several spot Bitcoin ETF applications, including those from major players like BlackRock, WisdomTree, and VanEck, pushing the verdict to at least mid-October. This delay followed a legal win for crypto asset manager Greyscale against the SEC. The court found some of the SEC’s reasons for declining spot Bitcoin ETF applications to be inconsistent, compelling the SEC to reconsider Greyscale’s proposal.
Post Greyscale’s win, Bloomberg Intelligence analysts increased the likelihood of a spot Bitcoin ETF approval by the end of 2023 from 65% to 75%. JPMorgan analysts believe the SEC will eventually have to approve the spot Bitcoin ETF applications, especially after Greyscale‘s legal triumph. They argue that the SEC would face challenges justifying its previous decisions without causing significant disruptions.
Furthermore, analysts from Bernstein suggest that following a potential Bitcoin ETF approval, an Ethereum fund might be next due to its analogous market dynamics. They believe the crypto ETF landscape will expand beyond just Bitcoin, encompassing various cryptocurrencies.
