The cryptocurrency market has been working for a long time and seems to have forgotten that the first bitcoin futures ETFs in the United States were allowed in October.
Investors' attention has long since shifted to other events. Meanwhile, the approval of spot ETFs could be a new catalyst for Bitcoin to take off and renew all-time highs.
SEC has "no reason" to refuse to create spot bitcoin ETFs
At least that's what Grayscale Investments thinks. The asset manager argues that the SEC "has no reason" to allow investment in the derivatives market while prohibiting investment "in the asset itself."
Recently, the SEC has refused several companies, including VanEck, to open spot exchange-traded bitcoin funds. While Grayscale considers this to be "discriminatory," it is also awaiting approval for its application to convert the Grayscale Bitcoin Trust (GBTC) into a spot fund.
Citing reasons such as the strong demand for physically-backed products, Dave LaValle, Global Head of ETFs at Grayscale Investments, previously argued:
"At Grayscale, we believe that if regulators are comfortable with ETFs that hold futures of a given asset, they should also be comfortable with ETFs that offer exposure to the spot price of that same asset."
SEC decisions are dubious, as are the risks of spot BTC
In its letter, Grayscale reiterates that Bitcoin is not a "security." This means that there are no prerequisites for registration under the Investment Company Act of 1940.
The asset manager questioned the SEC's previous deviations, which were attributed to risks of fraud and market manipulation. The firm said the rejection order "unfairly discriminates against BTC and its shareholders" and violates the Administrative Procedure Act (APA).
Grayscale argued that the investor risks associated with spot and futures exchange-traded BTC products are "indistinguishable." Also adding that "unfair" treatment is more likely to "harm, rather than protect, U.S. investors."
Not in the USA, so in Canada: there is always a way out
But, not all institutions are waiting for the SEC to decide to approve a spot ETF and find other options. For example, the largest asset manager in the United States, Fidelity Investments, launched its first bitcoin spot ETF in Canada. It will be called the Fidelity Advantage Bitcoin ETF and will be traded under the ticker $FBTC. The fund will buy physical bitcoins on the market and issue shares against them.
The crypto community lashed out at SEC chief Gensler for deliberately approving ETFs based on futures rather than spot ones. Many argue that the reason for this decision was that the futures market is easier to manipulate than the spot market.
Bloomberg ETF analysts had previously predicted that the SEC would likely approve a spot ETF by the first quarter of 2022. If such shifts occur, we may well be able to see an update of historical highs for BTCUSD, even if the end of the year is not so optimistic.
BTCUSD: two sidewalls
In the meantime, bitcoin, paired with the dollar, skillfully bounced off the sideways resistance 55,842.84 - 59,283.67 and did not maintain Tuesday's growth. The assumption that the consolidation will continue is justified for now.
But the boundaries of the technical range are not completely clear. If the sideways support of 55,842.84 - 59,283.67 is broken, then the corridor may expand to the area near $52,000 per coin. Even so, the market is still bullish.
