Spot Bitcoin ETF: The United States better not pass it

The world has been suffering from the bear market for a long time! Every wave of long signals will usher in a retaliatory increase, and the spot Bitcoin ETF has become the protagonist.

Over the past six months, true and false news about spot Bitcoin ETFs have driven the cryptocurrency to bottom out and rebound in the bear market. With the increased possibility of approval by the US SEC in the near future, the false news about ETFs has failed to prevent the continued rise in Bitcoin prices.

From an emotional point of view, it doesn’t matter whether the US SEC approves the spot Bitcoin ETF. What is important is the waves of price increases.

In the view of some crypto users, it would be better if the US SEC did not approve it, so that the market can continue to rise.

Fake news, real pull

This latest ETF rumor may go down in cryptocurrency history.

On the evening of October 16, Cointelegraph, a leading crypto media, published an article stating that the U.S. Securities and Exchange Commission (SEC) has approved the listing application of asset management giant BlackRock's spot Bitcoin ETF. Influenced by this news, the price of Bitcoin rose from $27,900 to $30,500 in 10 minutes, an increase of nearly 10%.

Subsequently, doubts were heard on social media and Bitcoin's gains began to fall back until BlackRock Group confirmed that its application was still under review, and Bitcoin's price fell back to around $28,000.

According to media reports, the incident resulted in a margin call of more than 1 billion yuan due to short selling.

In fact, before this, the price of Bitcoin had already shown an upward trend. In the first 24 hours before the fake news was exposed, the price of Bitcoin rose by 2.5%. After the fake news was clarified, the price of Bitcoin did not continue to fall, but rebounded and continued to rise. As of October 20, the price of Bitcoin was close to $30,000.

It’s not just fake news that’s driving the market higher, but also real developments and predictions related to spot Bitcoin ETFs.

According to media reports on October 19, both Grayscale and BlackRock updated their spot Bitcoin ETF application documents, indicating that the ETF issuers are negotiating with the SEC regarding the ETF.

JPMorgan Chase said in a recent report that the SEC may soon approve multiple spot Bitcoin ETF applications. "The timing of approval remains unclear, but it should be completed within a few months, most likely before January 10, 2024."

Since June this year, there has been a continuous flow of news on the progress and forecasts of spot Bitcoin ETF applications, and the Bitcoin market has also risen and fallen accordingly. Similar scenarios have become the norm.

On June 15 this year, asset management giant BlackRock officially submitted an application for a spot Bitcoin ETF to the SEC. Once the news was exposed, the price of Bitcoin rose from US$25,000 to US$31,000 within a few days.

BlackRock is the world's largest asset management company, with over $10 trillion in assets under management. Previously, BlackRock's ETF application approval rate at the SEC was 575:1, with only one application rejected by the SEC in October 2014. BlackRock's participation also led to the participation of other asset management companies, which in turn set off a new wave of applications for spot Bitcoin ETFs.

As of now, eight companies in the United States, including BlackRock, Grayscale, ARK Invest, Invesco, and Galaxy, are applying for Bitcoin spot ETFs. In addition, companies such as Global X and First Trust also hope to launch their own Bitcoin spot ETFs.

Bear market sentiment builds up

If the spot Bitcoin ETF is approved by the US SEC, it will become another milestone in the history of cryptocurrency. This not only means that the US regulatory authorities have legally recognized the legal status of Bitcoin as a financial product, but will also allow Bitcoin to be popularized among the public on a larger scale.

Data analysis company CryptoQuant pointed out in a report that if spot Bitcoin ETFs are approved in the United States, the entire cryptocurrency market will grow by $1 trillion. If issuers applying to list Bitcoin ETFs only invest 1% of their managed assets in these ETFs, about $155 billion will enter the Bitcoin market, which is almost 1/3 of Bitcoin's current market value.

Most analysts believe that this market activity is an early preview of what will happen if a spot Bitcoin ETF is actually approved.

However, the rise in Bitcoin prices is also related to the long-term accumulated sentiment in the bear market, and this farce of "fake news, real rise" proves this point well.

So far, the crypto bear market has lasted for a year and a half. After a series of events in the crypto industry in 2022, such as LUNA's return to zero, Three Arrows Capital's bankruptcy, and FTX's crash, Bitcoin once fell below $16,000 last year. After entering 2023, the price of Bitcoin began to rebound, and multiple positive news pushed the price of Bitcoin to a high of $30,000.

The ongoing bear market has led to widespread pessimism in the industry. Many people in the cryptocurrency circle told Techub News that they have been "lying flat" for a long time, waiting for the next bull market to come.

Looking forward to a bull market is the mentality of everyone in the cryptocurrency circle. At the same time, the suppressed emotions accumulated in the long-term bear market also need to be released.

At cryptocurrency gatherings, "when will the bull market come" is a must-talk topic. A cryptocurrency insider told Techub News: "The second half of next year is basically the industry consensus, but who doesn't expect it to come sooner?"

In addition, from the perspective of industry development, the bear market has also brought more foundations for the bull market. The advancement of supervision and compliance, more countries and regions embracing Web3.0, and the participation of traditional giants continue to build the foundation for the next wave of bull market in the crypto industry.

At the end of October last year, Hong Kong, China, announced its embrace of Web3.0 and its commitment to building an international virtual asset center. After nearly a year of development, Hong Kong has taken the lead in implementing a virtual asset exchange license system, and Hong Kong Cyberport has brought together 180 Web3 companies, including unicorns and licensed virtual asset trading platforms.

In July this year, South Korea held the "Seoul Web3.0 Celebration", and the Seoul government expressed its intention to make Seoul the center of Web3.0.

In August this year, Srettha Thavisin, a supporter of the crypto industry, was elected Prime Minister of Thailand and launched a national airdrop plan to airdrop virtual currency to all citizens over the age of 16.

In addition, giants in traditional industries such as Paypal and Visa have also embraced cryptocurrencies.

The cryptocurrency circle is looking forward to a bull market, and the industry is promoting wider application of cryptocurrencies, just as BlackRock CEO Larry Fink responded to fake news on October 17th - "This is an example of suppressed interest in cryptocurrencies. We have heard demand for cryptocurrencies from clients around the world. Cryptocurrencies will play the role of 'pursuit of quality'."

It is best not to pass ETF

It is still unknown when the spot Bitcoin ETF will be passed in the United States, but what is certain is that the SEC has fewer and fewer reasons to reject the ETF, the decision time has been postponed again and again, and the SEC has no plans to appeal the Grayscale ruling. These signs indicate that the time for the spot Bitcoin ETF to be passed is getting closer.

Recently, Grayscale issued a statement regarding the U.S. SEC’s decision not to seek a retrial, saying: “The 45-day deadline for seeking a retrial has expired, and the court will issue a final authorization within 7 days. The Grayscale team is ready to convert GBTC into an ETF once the SEC approves it.”

Grayscale Chief Legal Officer Craig Salm said that a spot Bitcoin ETF is a matter of when, not if.

According to Grayscale's official website, as of press time, GBTC is quoted at $22.45, and the negative premium rate has narrowed to 13.12%, the lowest level in a year. At the peak of the bear market, GBTC had a negative premium rate of nearly 50%.

Before it is officially approved, the US SEC may still delay for various reasons. However, in the "marathon" ETF application and long-term pull, the crypto community has gradually become numb.

A cryptocurrency player told Techub News that they were all hoping that the approval of the ETF would bring growth to the crypto industry, but the greater the expectations, the greater the disappointment, and they were even liquidated several times by these rumors.

In fact, many industry insiders do not have high expectations for the spot Bitcoin ETF. In their view, even if the US SEC approves it, it may not necessarily bring about a bull market.

In August this year, asset management company Jacobi listed Europe's first spot Bitcoin ETF on the Euronext Amsterdam. Many analysts believed that it would have a positive impact on the crypto industry. However, the market reaction was lukewarm and the US SEC did not speed up the approval process due to this incident.

As of press time, the ETF was quoted at $19.2, only 6% higher than the issue price. Prior to this, it had fallen below the issue price of $18 several times.

A crypto practitioner said on social media that ETF is a game. It is in the interests of the applicant if it fails. If it passes, the benefits are one-time and will be shared by other institutions. If it fails, you can keep playing, going long when the application is applied and short when it is rejected.

"It would be better if the U.S. SEC did not pass it, so that the crypto market can continue to pull up multiple times until the real bull market arrives," said a crypto user.