SEC wants institutions to prove Bitcoin is not a 'manipulated' asset class, as spot BTC ETF decisions delay

  • With multiple citings of the word 'manipulation' in the SEC's release, experts add this factor to the list of criteria for approval.
  • Nevertheless, considering BTC is an international asset, manipulation may be inevitable if not in the US than elsewhere.
  • For as long as the financial regulator stalls, crypto markets could continue in the current weakening momentum.

The US Securities and Exchange Commission (SEC) has delayed the much-anticipated decision concerning the recent market euphoria, Bitcoin Spot Exchange Traded Funds (ETF). It comes after several players in the institutional realm made applications, with market participants hoping that approval would finally catalyze the stalling BTC and broader market prices.

Also Read: Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Momentum eases as markets transition to weekend mood

Bitcoin price and crypto markets to wait longer

Bitcoin (BTC) price and crypto markets at large may have to wait a while longer after the SEC delayed a decision on BTC spot ETF from Cathie Wood's Ark21Shares. The disappointment comes as markets hold out hope for the possibility of trading cryptocurrencies directly on traditional financial exchanges in the US.

Despite the due date for Cathie Wood's Ark Invest being August 13, chatter about a delay comes after a filing by the financial regulator on August 11, asking the public for a commentary concerning amendments featured in the ETF applications. Citing a paragraph in the filing:

The Commission asks that commentators address the sufficiency of the Exchange's statements in support of the proposal…

With this, the financial regulator had effectively put off the date when a possible decision was due, provoking distress calls on Crypto X as this has just put out hopes for a soon-to-come impulse for the cryptocurrency market.

While the rumor that the decision may come in 2024 continues to brew, some experts have called market attention to the numerous citations of the word "manipulation" in the SEC's filing.

This points to the possibility of the SEC wanting institutional players to prove Bitcoin is not a manipulated asset class. If so, it adds to the former SEC official Jay Clayton's statements when he urged the applicants to prove efficacy if they wanted the financial regulator to approve their filings.

At the time, Clayton highlighted that critical considerations for the SEC to approve the filings would include surveillance and market protections for investors. These elements were previously absent in the spot BTC market.

Notwithstanding, considering Bitcoin is an international asset, manipulation may be inevitable. The SEC may exercise enforcement and control in the US, but considering BTC is a decentralized asset, its jurisdiction can only reach so far. Manipulation can come from any part of the world and still influence Bitcoin as it is seen in the US market.  

Further, there is also the concern that the market lacks impulse. With all hopes tethered to Bitcoin ETF as the next possible catalyst, the longer the financial regulator stalls, the more extended crypto markets could continue in the weakening momentum, with experts predicting a retest of the $27,000 range, or $26,000 in a dire case.

Bitcoin, altcoins, stablecoins FAQs

What is Bitcoin?

Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.

What are altcoins?

Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.

What are stablecoins?

Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.

What is Bitcoin Dominance?

Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.

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