In a strong reversal from yesterday’s sudden crash, the price of Bitcoin (BTC) has staged a recovery, crossing the $43,000 mark. This rise comes after yesterday’s intense volatility, when the cryptocurrency giant witnessed a flash crash of over 11% following a controversial report from Matrixport.
The report suggested a possible rejection by the US Securities and Exchange Commission (SEC) of the long-awaited spot Exchange Traded Funds (ETFs), which would lead to the second largest liquidation of long positions in the past year. The price of Bitcoin plummeted to a low of $41,500.
However, Bitcoin is currently stabilizing above $43,000, driven by a combination of factors. Notably, several experts have disputed the validity of the Matrixport report. In addition to the positive sentiment, an important SEC-related update has captured the market’s attention.
Bitcoin ETF tomorrow?
According to a report by Fox Business SEC staff attorneys from the Division of Trading and Markets were involved in crucial conversations Wednesday with representatives from major exchanges such as the New York Stock Exchange, Nasdaq and the Chicago Board Options Exchange. This involvement is significant as it relates to the approval of several Bitcoin ETF applications.
The meetings are seen as a positive sign that the SEC is nearing approval of some or all of the dozens of applications from major money managers and crypto firms for the product. An anonymous source familiar with these developments stated: “While the final decision has not yet been made, sources close to the proceedings say the SEC could begin notifying issuers of approval on Friday, with trading starting as early as next week.”
Bloomberg ETF analyst James Seyffart commented to the report from Eleanor Terrett of Fox Business via I think the SEC could start signaling to issuers to expect approvals, although I still expect official approvals from January 8 to 10. I also think the gap between approval orders and actual trading will be measured in days – not weeks.”
Echoing Seyffart’s views, Eric Balchunas, his colleague at Bloomberg, said: commented“Things you probably won’t do if you deny or postpone. I’m hearing the same thing btw, and why, if we see updated (final) 19b-4s coming in, signing approval is imminent, as SEC has been doing back and forth with issuers offline to perfect their 19b-4s versus numerous rewrites a la S- 1s .”
Scott Johnsson, a financial attorney at Davis Polk, weighed on Balchunas’ statement: “In every previous ETF wave, the SEC did not do this. Why? Because (1) this takes up a lot of SEC resources and (2) makes it MUCH harder to successfully survive legal investigations (and after grayscale, this is like drawing blood from a stone). If you intend to deny, just deny.”
BTC price remains ultra bullish
In light of these developments, the cryptocurrency market remains cautiously optimistic, with indicators strongly pointing to an ETF approval by January 10, possibly as early as January 5. half October. At the time of writing, BTC was trading at $43,102.
Featured image from TradingView.com’s Shutterstock chart
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