Unpopular Opinion: Is the SEC the Key Behind the Next Crypto Bull Market?
The crypto market has recovered a lot of the losses sustained in 2022, with BTC rising by over 80% YTD and many altcoins performing even better. This led to questions and analysis within the community about whether the bear market is over and the industry is preparing for yet another bull cycle.
Moreover, the BTC halving is scheduled to take place in less than a year, which is typically regarded as a catalyst for upcoming price increases. However, the recent developments from the US Securities and Exchange Commission could suggest that the agency might also have a role in a potential bull market.
The SEC Impact
Being among the most powerful regulators within the world’s largest economy, the SEC’s actions frequently have a direct impact on a relatively small market like crypto. As such, when the Commission decided to go after Ripple in late 2020, as well as Coinbase and Binance, a few months ago, it harmed most digital assets’ prices almost immediately.
While this doesn’t sound all that surprising that the SEC’s lawsuits could hurt projects and companies, there’s also the opposite angle. We saw it earlier this week when Judge Analisa Torres, presiding over the agency’s case against Ripple, ruled in favor of the blockchain project, indicating that almost all XRP sales did not constitute security transactions, something that the SEC has been trying to prove for years.
The judge’s decision had an immediate and massive impact not only on XRP’s price but many other altcoins, which the SEC alleged to be unregistered securities.
Consequently, it’s safe to assume that the entire market could further surge should the agency lose its ongoing battles with the likes of Coinbase and Binance – two of the industry’s most prominent players.
Spot Bitcoin ETF
The other aspect on which the SEC’s actions have a direct impact is whether the US will (ever) have a spot Bitcoin exchange-traded fund. The regulator has rejected countless applications in the past decade from companies such as Grayscale, Ark Invest, Fidelity, WisdomTree, VanEck, and many others.
With the agency’s growing attacks against the industry with its latest series of lawsuits, many believed that such a product will not see the light of day, at least not any time soon.
However, the tides changed in mid-June when BlackRock, the world’s largest asset manager and arguably the most influential financial giant, filed to release a spot Bitcoin ETF – a move mimicked by several other companies. BlackRock has a mindblowing success rate when it comes down to ETF applications, with the SEC of 575 to just 1.
Its filing for a spot BTC ETF had a profound effect on the cryptocurrency’s price, which soared past $30,000 for the first time in months after being stuck at around $26,000 – $27,000 for weeks.
The SEC first dismissed all recent applications, deeming them “inadequate,” which triggered immediate price declines as well. However, BlackRock, as well as the rest of the ETF seekers, amended the filings. Moreover, the agency recently accepted BlackRock’s application, thus commencing the official review process.
Although that could that a long time, a potential approval of a spot Bitcoin ETF in the States could also have a colossal and immediate effect on the entire market. After all, BTC did chart its current ATH of $69,000 amid the approval of the first futures BTC ETF in the US back in late 2021.
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