BTC Value Stumbles Amidst SEC’s Request for Bitcoin ETF Refiling, Notching a 6% Drop

12 views 9:49 am 0 Comments July 3, 2023

When the American Securities and Exchange Commission (SEC) requested a refiling of Bitcoin ETF submissions, the value of Bitcoin dipped to under $30,000. This sudden drop prompted a wave of uncertainty across the markets regarding the outlook of Bitcoin’s nascent spot exchange-traded funds (ETFs).

Is the Bitcoin ETF Filing Hiccup Just a Simple Oversight?
Reports from trading analytics platforms like Cointelegraph Markets Pro and TradingView reflected a drastic tumble in BTC’s market valuation, momentarily falling to a $29,500 trough. This shift coincided with the disclosure that the U.S. regulatory body, SEC, had turned down the initial applications for a Bitcoin spot-price ETF.

The said applications had been the driving force behind a resurgence in BTC’s price, propelling the top-tier cryptocurrency to unparalleled highs within the fiscal year.

Unsettling News from SEC Spurs Mixed Reactions
An unnamed source referenced by The Wall Street Journal stated the applications were reciprocated. This led to a temporary slump in BTC/USD to a nine-day nadir before it rose again to orbit around $30,000.

The preliminary report delved into the reasoning behind the rejection of the applications, with many market analysts implying this was more of a procedural matter rather than a significant concern.

As per WSJ’s report, “The SEC returned the filings due to a lack of specific mention of the spot bitcoin exchange engaged in the ‘surveillance-sharing agreement’ and insufficient details on the specifics of these arrangements.”

A few tweaks in language and asset managers can file once more.

One could interpret such a suggestion as the SEC giving BlackRock necessary pointers to secure their application’s approval, a positive development,” argued financial pundit Tedtalksmacro, offering a more hopeful perspective.

Rising Interest Rates Despite Surprisingly High PCE Data
Bitcoin continued to trade at a figure exceeding $1,000 under the day’s pinnacle when the news broke.

This drop was fortuitously timed with the pending monthly and quarterly candle close, inciting additional market speculation.

Simultaneously, U.S. macroeconomic data added to the uncertainty in risk asset markets. The Personal Consumption Expenditures (PCE) Index performance fell below projections, marking its most significant decrease in a year.

Regardless of indications of slowing inflation, markets started preparing for a greater likelihood of interest rate hikes in July.

Recent information from CME Group’s FedWatch Tool suggested a nearly 90% chance for a 25-basis-point hike soon.

Reacting to these developments, financial commentary portal The Kobeissi Letter argued that inflation is still excessively high despite recent outcomes.

It asked, “Why are there heightened expectations for interest rates post the release of PCE inflation data? The core PCE inflation, the Fed’s choice metric for inflation, hasn’t changed since December 2022. At a present 4.6%, the core PCE inflation is still a formidable issue for the Fed.”

An Added Perspective: Bitcoin ETF’s Importance
The green-lighting of Bitcoin ETFs is seen as a key milestone for several reasons.

Primarily, Bitcoin ETFs offer institutional investors a way to gain Bitcoin exposure without actual ownership of the cryptocurrency. This access would enable different institutional investors to incorporate Bitcoin into their portfolios in a more regulated and familiar manner.

Secondly, the validation of a Bitcoin ETF by a regulatory body like the SEC would represent a significant leap towards mainstream acceptance and recognition of Bitcoin as an asset category. This could boost Bitcoin’s valuation and the wider cryptocurrency sector.

Lastly, enhanced liquidity due to a Bitcoin ETF could potentially refine the fluidity and stability of Bitcoin’s price. This could render Bitcoin more suitable as a value store and exchange medium, amplifying its widespread adoption.

As the Bitcoin ETF saga continues to unfurl, the market’s collective gaze remains fixed on this evolving story.