On the evening of August 31, the price of the first cryptocurrency tested below $26,000. At one point the asset fell to $25,660 (on Binance).
Over the last 24 hours, Bitcoin has fallen 4.6%, according to CoinGecko. It is currently trading above $26,000.
Following the leader, all assets in the top 10 by market capitalisation moved into the red. Ethereum fell 3.4%, with Solana the biggest laggard at 4.3%.
Bitcoin closed August down 11%.
The market’s negative reaction stems from actions by the U.S. Securities and Exchange Commission (SEC). On August 31 the agency postponed a decision on applications to launch spot Bitcoin ETFs from BlackRock, Fidelity, Bitwise, VanEck, WisdomTree, Invesco and Valkyrie at least until mid-October.
Overall, the regulator has 240 days from the start of consideration of the applications. Earlier, Bloomberg analysts James Seyffart and Eric Balchunas assessed the probability of launching a spot Bitcoin ETF by the end of 2023 at 75%.
Analysts raised odds after Grayscale’s legal victory in its case against the SEC. However they did not rule out delays.
On June 15, BlackRock sent a filing with the SEC for a digital-gold-based investment product. Following the tech giant, similar proposals arrived from Valkyrie, Fidelity Investments, WisdomTree and Invesco. Yet the regulator sent back all filings.
Subsequently the companies promptly submitted to the agency revised proposals. On July 14 the Commission took the applications under review from BlackRock, VanEck, Invesco, Fidelity Investments and WisdomTree.
So far the SEC has not granted any approvals for launching spot Bitcoin ETFs. The Commission did make an exception for futures-based products on the first cryptocurrency from ProShares and Valkyrie Investments.
As noted, former SEC attorney John Reed Stark ruled out approval of a spot exchange-traded fund based on digital gold. However Bernstein analysts and former chair SEC Jay Clayton assessed the odds of a new wave of applicants as high.
Marathon Digital CEO Fred Thiel is optimistic, and Fundstrat co-founder Tom Lee predicted a substantial rise for Bitcoin if the applications are approved.