- The approval of BTC ETFs may be further delayed in America.
- Europe, on the other hand, approved its first spot BTC ETF, taking the lead in crypto regulation.
The US SEC’s Pending Judgment on Bitcoin[BTC] ETF proposals drafted by various institutions have kept traders on the edge of their seats. While US regulation is slowing down, Europe has given the crypto community some respite with its latest approval.
Read the Bitcoin price forecast for 2023-2024
Europe is taking an optimistic approach
Despite the uncertainty surrounding ETF approvals in the US, Europe was more willing to give BTC a shot.
London-based Jacobi Asset Management with success launched Europe’s first spot bitcoin ETF on Euronext Amsterdam. The ETF, called Jacobi FT Wilshere Bitcoin ETF, received approval from the Guernsey Financial Services Commission (GFSC).
It is traded using the ticker “BCOIN”. Fidelity Digital Assets provided custody of the fund, while market operations are handled by Flow Traders.
Originally approved in October 2021, Jacobi chose to postpone his listing plans due to challenging crypto market conditions.
The current state of affairs in America
Regulatory uncertainty remains high in the US
In June, BlackRock filed its Bitcoin ETF filing with the SEC, sparking renewed interest from investors. BlackRock later entered into a “surveillance-sharing agreement” with Coinbase, potentially influencing the SEC’s consideration of ETF applications.
Supervisory sharing agreements allow the sharing of information about market trading activities, clearing activities and client identification, with little risk of market manipulation.
Aside from BlackRock, several companies including Valkyrie and Ark Invest also have crypto ETF filings pending SEC review.
What set Valkyrie’s application apart was the fact that the company transformed their Bitcoin ETF into one that combines Bitcoin and Ether.
However, the SEC is still unsure about the Bitcoin spot ETF. Ark Invest’s spot ETF approval was delayed by an additional 21 days by the SEC.
The regulator has the authority to defer all these ETF applications for up to 240 days. And interestingly, not a single spot Bitcoin ETF has been approved in the US to date. Only BTC futures-linked ETFs are accepted.
One hurdle to approval of spot crypto ETFs can be the nature of the investment. Unlike Bitcoin futures-linked ETFs, a spot BTC ETF involves direct Bitcoin investment within a fund, which presents unique challenges.
As a result, the SEC could extend Bitcoin ETF approval deadlines to early 2024. The SEC may use a period of up to 240 days to delay crypto ETF filings, which may require some companies to wait for decisions until March 2024 for filings submitted in July 2023.
Potential impact on the market
In a recent report, Bernstein, a brokerage firm, stressed that crypto ETFs create demand in the spot market and signal regulatory approval, boosting retail and institutional flows in search of legitimacy.
Analysts noted a growing interest from global asset managers in bitcoin spot ETFs and possible solutions to address SEC concerns, raising the likelihood of approval.
Bernstein predicted a significant spot bitcoin ETF market, reaching 10% of bitcoin’s market cap in two to three years. The brokerage expects cryptocurrency ETFs to benefit from robust brand marketing by asset managers and distribution efforts by retail brokers and financial advisors.
According to Bernstein, fresh capital for a new crypto cycle will come from a new supply of stablecoins. But traditional asset tokenizations and ETFs will also play a major role. The report pointed out that on-chain assets remained in the $40 billion range this year. On the other hand, circulating stablecoins reached about $120 billion.
State of Bitcoin
According to data from Santiment, Bitcoin maintained a stable price range of $29,400, showing remarkable performance when compared to stock markets such as the S&P500 in August. This deviation from the correlation, which started in mid-July, has historically carried positive implications for crypto prices.
Bitcoin’s ability to maintain stability amid market fluctuations has several implications. First, its resilience boosts investor confidence, potentially attracting more participation and investment from traders.
In addition, the positive sentiment generated by Bitcoin’s performance could contribute to improved liquidity in the cryptocurrency sphere, streamlining buying, selling and trading processes.
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In addition, regulatory considerations may be affected by Bitcoin’s continued resilience, challenging preconceived ideas about volatility and speculative nature.
Source: Sentiment
Traders turn bearish
Despite these factors, traders became pessimistic. This was indicated by the rising put-to-call ratio, which implied that many traders were betting that BTC prices could fall further in the near future. Investors can adjust their strategies to hedge against market volatility or to take advantage of potential downward price movements.
Source: The Block