By Frances Yue
A false report regarding the approval of a bitcoin-based exchange-traded fund (ETF) in the U.S. sparked a temporary price rally for the cryptocurrency on Monday, but the gains quickly faded.
While the initial report may have been misleading, most market participants in the crypto industry still anticipate that the U.S. Securities and Exchange Commission (SEC) will approve an ETF focused on bitcoin itself by January 10, 2024. This is the final deadline for the agency to respond to the application for a spot bitcoin ETF by ARK Invest and 21Shares.
According to analysts at QCP Capital, there is a general consensus that actual SEC approval for any application or conversion will not occur this year. As a result, the future movement of Bitcoin’s price, whether it remains below $25,000 or exceeds $32,000, will largely depend on macroeconomic factors during the remainder of Q4.
However, Quinn Thompson, head of capital markets and growth at Maple Finance, expressed optimism, suggesting that the chances of the SEC approving a spot bitcoin ETF this year may be higher than most have anticipated. Thompson highlighted the presence of positive signs within the industry.
The SEC’s decision not to contest an August federal court ruling, which required the agency to overturn its rejection of Grayscale Investments’ application to convert its Bitcoin Trust product into an ETF, has also contributed to this optimistic sentiment. The deadline for the SEC to appeal this ruling was October 13.
Thompson went on to suggest that if optimism surrounding bitcoin ETFs continues to grow, it could potentially drive the cryptocurrency’s price up to $35,000 by the end of this year.
Bitcoin and Gold Show Resilience
In other news, treasury yields have been rising due to strong U.S. economic data, causing concerns among investors that the Federal Reserve may maintain higher interest rates for an extended period of time. This development indicates that both bitcoin and gold, as alternative assets, have demonstrated resilience in volatile market conditions.
Higher Yields Weigh on Gold and Bitcoin
As Treasury yields rise, it could have an impact on the prices of gold and bitcoin. This is because the opportunity costs of holding these assets increase, as they do not generate any interest.
Despite this, both crypto and gold prices have shown resilience recently.
Gold futures have risen over 6% this month, while bitcoin has gained 3.3% over the same period, according to FactSet data.
Concerns of a Crash in the Markets
Market participants in the gold and bitcoin space are becoming aware that the surge in yields can only go so far before the Federal Reserve steps in to prevent a crash in the markets. Thompson, a market analyst, highlighted this during a call.
According to Thompson, bond volatility indexes are approaching levels historically associated with government intervention.
Lawsuit Accuses Gemini, Genesis, and DCG of Fraud
Letitia James, the New York attorney general, has filed a lawsuit accusing crypto companies Gemini Trust, Genesis Global Capital, and its parent company Digital Currency Group (DCG) of defrauding over 230,000 investors of more than $1 billion.
The lawsuit alleges that Gemini lied to customers about the safety of their investments, assuring them that their funds were secure while under Genesis’ control, even though Genesis was aware of its precarious financial conditions.
Crypto Market Snapshot
In the past seven days, bitcoin has gained 6.7% and was trading around $28,769 on Thursday, based on CoinDesk data. Ether also rose by 0.9% during the same period, reaching around $1,570.
