SEC Delays All BTC Spot ETF Decisions, Is It Bearish or Bullish?
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Market Review
Last week (8.28-9.3), there was a divergence among cryptocurrency indicators, which is the first occurrence this year.
The total market capitalization initially rose and then fell to $1.04 trillion, reaching a new low since August, getting closer to the $1 trillion mark, indicating increasing risks.
In contrast, the market sentiment index continued to rise from 39 to 44, reflecting improved user sentiment and positive expectations for the future market.
Cryptocurrency market cap (yellow) and fear-greed index (blue) trend from January 1, 2023, to September 3, 2023; Source: MacroMicro.
Overall, mainstream coins experienced primarily downward trends with larger declines in some cases. Bitcoin Cash (BCH) performed relatively well, rising by 3%, followed by Chainlink (LINK) with a 1% increase.
Polkadot (DOT) and Uniswap (UNI) performed the worst, both experiencing a decline of 7% and 6% respectively.
Bitcoin (BTC) declined by 1%, but its market share increased by 0.3% and currently stands at 48.3%. Ethereum (ETH) saw a price decrease of 1% and a 0.2% decrease in its market share, maintaining 18.9%.
Performance of mainstream coins from August 28 to September 3, 2023; Source: MacroMicro.
SEC Delays All BTC Spot ETFs
As of September 4th, the U.S. Securities and Exchange Commission (SEC) has delayed decisions on seven Bitcoin spot ETFs. These include iShare Bitcoin Trust, Bitwise Bitcoin ETP Trust, VanEck Bitcoin Trust, Wisdomtree Bitcoin Trust, Invesco Galaxy Bitcoin ETF, Wise Origin Bitcoin Trust, and Valkyrie Bitcoin Fund.
When will the SEC make the final decision? According to the data, there are four deadlines for the SEC's decision on each BTC spot ETF: September 2023, October 2023, January 2024, and March 2024. This means that the SEC can continue to postpone until the final deadline.
Deadline schedule for SEC approval or rejection of BTC spot ETFs; Source: Bloomberg Intelligence.
According to the above table, it can be seen that the September decision period has passed, and the next decision period is in October. During that time, the SEC can approve or reject applications, or they may also choose to postpone. However, regardless of what the SEC wants to do, they must provide a decision of approval or rejection by March 2024.
Is the SEC's delay of BTC spot ETF positive or negative?
On August 29th, after the news of Grayscale winning against the SEC came out, BTC experienced a significant surge. However, due to the impact of the SEC's delay in the decision on BTC spot ETF, BTC changed from a rise to a sharp decline, experiencing a considerable pullback. It can be observed that the SEC's delay decision is considered negative.
Bitcoin daily price chart, source: TradingView.
However, there is no need to overly worry about this seemingly short-term negative impact. Currently, the SEC still has control over BTC spot ETF and can use delaying tactics. Nevertheless, this precisely reflects that the SEC has reached a dead end and has no alternative but to procrastinate. However, this cannot be sustained because March of next year is the deadline.
Regarding this, JPMorgan Chase stated that after Grayscale's victory in the lawsuit against the SEC, the SEC may have no choice but to approve multiple spot Bitcoin ETF applications.
Bitcoin: Roller Coaster Market, Buy on Dips
Influenced by two pieces of news, Bitcoin has experienced a roller coaster market. On August 29th, Bitcoin surged, and on August 31st, it dropped sharply, with a fluctuation of around 8%.
Currently, Bitcoin is trading sideways, closely hovering around $26,000, with a volatility of less than 1%. Both bulls and bears show no significant desire to take control, and the trend is very weak.
Bitcoin price chart from September 2022 to September 2023, source: TradingView.
The bullish and bearish trends of Bitcoin are uncertain, and it is easily driven by market news but unable to sustain momentum. This situation is more suitable for short-term trading. It is advisable to buy on dips near the bottom of the range, around $26,000. However, it is essential to set stop-loss and take-profit levels properly; otherwise, profits generated by news-driven movements can be quickly wiped out or result in liquidation.
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* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
