Bitcoin rally cools in countdown to US spot ETF decision

Applicants amended forms on Monday in the US in a final push to offer spot bitcoin ETF products more than a decade after the first attempt.

SEC chairman Gary Gensler has repeatedly argued that crypto is rife with fraud and misconduct. The agency cracked down on the sector following a 2022 market rout and collapses such as the bankruptcy of Sam Bankman-Fried’s FTX exchange.

But the SEC last year lost a key legal fight against crypto asset manager Grayscale Investments, spurring speculation that the regulator will have to acquiesce to the spot ETFs.

Critics contend that the products pose a risk for investors given that digital assets are notorious for volatility and attracting illicit activity.

“What’s going to happen, unfortunately, is lots and lots of Americans in our view, are going to get hurt financially,” said Dennis Kelleher, chief executive of financial reform non-profit Better Markets.

The advance in bitcoin has lifted the digital-asset market more broadly, bolstering smaller tokens such as solana and cardano. US crypto-linked stocks mostly rose on Wall Street, setting up a tailwind for Asian peers such as Japan’s Monex Group and Woori Technology Investment in South Korea.

Some crypto watchers wonder whether Bitcoin is ripe for a pullback if and when SEC approval finally lands, since speculators may decide to bank a slice of profits from the token’s rally.

There are “no signs” of such activity yet, Chris Weston, head of research at Pepperstone Group, wrote in a note. Based on chart patterns, the $US51,000 level is a possible target before any such pullback, according to Tony Sycamore, a market analyst at IG Australia.

Looking past short-term price gyrations, “the main result of bitcoin spot ETF approval will be the marketing machine behind greater bitcoin awareness, powered by some of the largest names in traditional finance”, wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter.

Bloomberg

Bloomberg