24.10.2023 – Bitcoin is once again scratching the $35,000 mark. And has thus returned to price regions last reached in the spring of 2022. The market is hoping for the dawn of a new, bullish era. The reason is a break in the US justice system.
While the world is watching the conflict in the Middle East and puzzling over the consequences of an escalation for stock markets and oil, investors in BTC have regained their courage. Here is the daily chart. Since the end of last year, the price has more than doubled.
Source: Bernstein Bank GmbH
The reason for the new buying mood: an appeals court has just fuelled new hopes in the matter of spot funds for cryptos.
Victory for Grayscale
The U.S. Court of Appeals for the District of Columbia Circuit struck down a Securities and Exchange Commission ruling that prohibited Grayscale Investments from converting an existing fund into a crypto ETF based on the spot market. The SEC had argued that the index fund was not sufficiently monitored, which could result in fraud. Grayscale had countered that there were already new monitoring regulations for funds investing in futures that could also be applied to trading in the real underlying.
Judge Neomi Rao called the SEC’s decision arbitrary and capricious because the Securities and Exchange Commission had allowed other providers to offer similarly structured funds. The case was remanded to the SEC for reconsideration. Since the agency waived an appeal, bulls now believe that a new era will soon dawn for Bitcoin and co.
Waiting for the first spot ETF
Specifically, this means: The first exchange traded funds that buy into the sports market could receive approval in the coming weeks. Rumours of this kind had recently pushed BTC up again and again. This could dramatically expand the circle of potential investors – and thus boost demand – because it would be a kind of seal of approval for the cryptocurrency. Market giants like Blackrock, Invesco and Fidelity Investments are working to get approval for the first spot ETF.
However, the SEC still opposes direct investment by funds in Bitcoin; at best, futures are permitted. Meanwhile, Bloomberg pointed out that the iShares Bitcoin Trust was listed on the DTCC – the Depository Trust and Clearing Corp. is a clearing and settlement agency. This means that market participants execute trades here and ensure that money flows. The DTCC does not mean there is approval for the fund – but it is an important step towards official market readiness, it said. Blackrock is behind iShares.
Our conclusion: If the approval of the spot ETFs comes, billions in fund money are likely to pour into Bitcoin, Ether and co. However, a sell the news could also set in. We are curious to see what happens next and will keep an eye on the matter for you.
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