• Bitcoin price takes a nosedive to trade below $26k after staging a rally last week to hit $28k.

• The reason for the fall has been linked to the delay in SEC’s ETF decision which was expected to be made by Friday. 

The crypto market made a shocking turnaround last week with Bitcoin leading the altcoins to break key resistance levels in what looked like a typical rally. Buyers re-entered the market and dominated sellers with aggressive purchases following reports that Grayscale Investments had been awarded victory over the US Securities and Exchange Commission.

As CNF reported, the court spotted some red flags in the SEC’s decision to reject the asset manager’s spot Bitcoin Exchange-Traded Fund (ETF) application. This, coupled with several predictions of a possible approval of at least one of the six ETF applications created some positive sentiment in the market. In a surprising twist of event, buyers have lost control over the market as Bitcoin price declines to trade below $26k. As of press time, the asset was trading at $25,710.25. 

The decline has been linked to the delay of key ETF decisions by the SEC that was expected by Friday. According to Simon Peters, an analyst at eToro, investors have no option but to stay back and continue guessing.

As we enter September, the cryptoasset market remains on the edge of its seat as various macroeconomic and regulatory narratives continue to leave investors guessing. With the route to lower rates still unclear and bitcoin spot ETF approvals still waiting, the market will continue its guessing game on major cryptoassets’ direction of travel.

Could a Spot Bitcoin ETF be Approved

Currently, most companies that had their ETF applications rejected have re-submitted, but the odds are said to be favoring BlackRock due to its background. The company has had 575 ETF applications approved by the SEC. Interestingly, only one has been rejected so far. Many experts suspect that the company probably has a wild card, and this could be the reason for applying at a time like this. 

According to JPMorgan analysts led by Nikolaos Panigirtzoglou, the Commission may be forced to approve an ETF application following the court’s ruling.

The most important element of the Grayscale vs. SEC court ruling was that the denial by SEC was arbitrary and capricious because the Commission failed to explain its different treatment of similar products i.e., futures-based bitcoin ETFs.

SEC’s main ground for the spot Bitcoin ETF rejections is potential manipulation and fraud. Interestingly, the Commission has approved a Bitcoin futures ETF. It is important to note that Bitcoin futures ETF tracks Bitcoin futures traded on the Chicago Mercantile Exchange (CME). With this, the court believes that the proposed Bitcoin ETF is very similar to the approved Bitcoin futures ETF. In this case, fraud and manipulation in the spot market could be the same concern in the futures market. According to the panels, both markets are “tightly correlated.”

It is worth noting that applications from Cathie Wood’s ARK, Fidelity and Invesco (IVZ.N), and several other asset managers have been rejected by the Commission. In the Grayscale vs. SEC case, both parties have 45 days to appeal the ruling. If the SEC does not appeal, the court would have to specify how the decision should be carried out. This could ultimately draw billions of dollars into the crypto market and push Bitcoin to a new all-time high. 

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