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Bitcoin To $185,000 if Spot ETF Is Approved: Expert
If the United States Securities and Exchange Commission (SEC) ends up approving a spot Bitcoin exchange-traded fund (ETF) anytime in the coming days or weeks, one expert is confident BTC prices will explode more than 6x to $185,000.
As of August 30, BTC is changing hands below $30,000 but remains firm.
Bitcoin To $185,000?
In a recent CNBC interview, Tom Lee, who regularly comments on Bitcoin prices, said a spot ETF will mop up all daily supply of the world’s most valuable cryptocurrency, creating an “imbalance” that will inevitably drive prices higher. Based on this, demand will significantly outstrip supply, driving prices to $185,000 or higher.
Bitcoin remains the world’s largest cryptocurrency by market cap despite the sharp contraction throughout the past 20 months.
At peaks, BTC surged to over $69,000 only for sentiment to shift in 2022, triggering a sell-off that saw prices declined more than half, bottoming up from below $16,000 in November 2022.
While prices have since recovered, surging over 50% from November 2022 lows to peaking at over $31,000 in late July 2023, the crypto and Bitcoin communities have their eyes on the SEC.
The stringent regulator has been adamant, dismissing previous applications for a complex ETF derivative directly tracking Bitcoin prices. While the SEC has approved a Bitcoin Futures ETF that tracks an index aggregating prices from multiple regulated exchanges, the nascent industry demands an spot BTC ETF.
SEC Likely To Approve Spot ETF?
Following August 29’s court ruling that supported Grayscale’s assertion that robust measures are in place for their Bitcoin spot ETF to be free from market manipulation, the community has been ecstatic. The ruling was a loss for the SEC, but the court didn’t mention or guide the regulator in approving a Bitcoin ETF.
Nonetheless, following the sharp expansion of Bitcoin prices from around $25,800 to as high as $28,000, there is a section of optimists who believe the SEC has little wiggling space and have no option but to greenlight a Bitcoin ETF in the coming weeks if not months.
On August 30, Eric Balchunas and James Seyffart, two of Bloomberg’s senior ETF analysts, increased their odds of the SEC approving a spot ETF in 2023 to 75% (up from 65%). If it doesn’t get approved this year, they estimate that the regulator will likely allow entities to create this product next year since their probability is 95%.
Their confidence stems from the fact that the “unanimity and decisiveness” of the recent court ruling in the SEC versus Grayscale case was “beyond expectations and leaves SEC with “very little wiggle room.” Moreover, in their assessment, the SEC has suffered a “PR” loss since the ruling was widely covered.
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GBTC Shares See Volumes Climb To 2-Year High Amid Grayscale’s Victory Lap
On August 29, the US Court of Appeals ruled in favor of Grayscale in its legal battle against the US Securities and Exchange Commission (SEC). Following this, Grayscale’s GBTC shares trading volume significantly increased, climbing to a 2-year high in the process.
GBTC Shares See 17% Increase
According to data from Yahoo Finance, GBTC’s share price had opened at $17.66 on the day and closed at $20.56, rising by almost 17% from the previous day. Furthermore, the fund saw its busiest day in over a year, with over 19 million GBTC shares changing hands. This volume jump marked the fund’s highest in over two years.
These figures aren’t surprising, considering that Grayscale’s victory presents a bullish outlook for the fund. Furthermore, Grayscale’s GBTC is one step closer to being converted into a Spot Bitcoin ETF, so many investors may want to get in on the fund at a discounted price.
GBTC currently operates as a closed-end fund and has seen a discount as high as 48.89% of its net asset value (NAV) in December 2022. This discount has been reduced to about 18% following the court’s ruling in favor of Grayscale. However, some still believe this gap could close further, especially if Grayscale’s ETF application were approved.
Big Win For The Crypto Community
Grayscale had filed a lawsuit following the SEC’s refusal to grant its application to convert its GBTC fund into a Spot Bitcoin ETF.
Grayscale argued that the SEC acted arbitrarily and capriciously by not giving it the same regulatory treatment the Commission did to the Teucrium Bitcoin Futures Fund and the Valkyrie XBTO Bitcoin Futures Fund.
The fund stated that it deserved the same treatment as the Bitcoin futures fund because the prices of both Spot and Futures Bitcoin ETFs were “99.9%” correlated, so they posed the same risk regarding fraud and manipulation.
The court adopted Grayscale’s argument and agreed that the SEC had not provided sufficient reason for denying Grayscale’s application while approving the Bitcoin futures funds.
With this ruling, the SEC’s primary reason for not approving a Spot Bitcoin no longer carries weight, as the Commission can no longer deny applications solely because the Spot Bitcoin market has no regulated market of significant size.
The court already found both funds (spot and futures) to be similar, so these exchanges’ surveillance sharing agreements with the Chicago Mercantile Exchange (CME) should be sufficient to deter manipulation in either the spot or futures market.
While it remains to be seen what step the SEC will take regarding the Court of Appeal’s ruling, there is an increased likelihood that the Commission will have to approve the pending Spot Bitcoin ETF applications except if it can find another reason to deny these proposals.
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Renowned Economist Explains Why Grayscale’s Win Is Not Good For Bitcoin Price
One of the major highlights of Grayscale’s victory over the US Securities and Exchange Commission (SEC) was its positive effect on Bitcoin’s price. However, renowned economist Peter Schiff has explained why Grayscale’s win may not be good for Bitcoin in the long run.
A GBTC ETF ‘Bearish’ For Bitcoin
Schiff tweeted that the GBTC fund becoming a spot ETF (Exchange-traded Fund) is “actually bearish” for the flagship cryptocurrency as he said this move could potentially increase Bitcoin’s “tradable supply.”
If approved, investors in the GBTC fund will now be able to redeem their Bitcoin, which Schiff has highlighted is bad for Bitcoin’s price and the market as GBTC will have to sell BTC into the market, thereby increasing the tradable supply.
Schiff’s concern probably stems from the fact that GBTC reportedly owns over 3% of Bitcoin’s circulating supply, so a sell-off due to redemptions could significantly impact the market, causing Bitcoin’s price to reduce.
However, other X (formerly Twitter) users quickly pointed out that other ETF applications will likely be approved alongside Grayscale’s application. As such, there will be enough demand to balance out the increase in supply that could result from Grayscale’s redemptions.
Grayscale had applied to the SEC to convert its GBTC fund into a Spot Bitcoin ETF. However, the regulator rejected the application, leading Grayscale to file a lawsuit against the SEC, stating that the Commission acted arbitrarily and capriciously in its disapproval order.
Following the Appeal court’s ruling in favor of Grayscale, the SEC now has to review the asset manager’s application again with the possibility of an approval higher this time. This is because Grayscale has been able to establish before the court that it should enjoy the same treatment given to Bitcoin Futures ETF which the Commission has had no problem approving.
The SEC’s Next Steps
Legal expert Jake Chervinsky also chimed in to state that the court delivered a “huge embarrassment” for the SEC. As to the next steps that the regulator might take, Chervinsky highlighted four theories.
Firstly, he believes the SEC could just pick another reason to deny Grayscale’s proposal, which could lead to another long-running legal battle between both parties. Apparently, the court had ruled that the Commission didn’t provide sufficient reason to deny Grayscale’s application as it faulted the “significant market” test size as wrong.
His second theory is that the SEC will choose to abide by the court’s decision and use that as an excuse to drop its “anti-ETF position.”
Furthermore, the legal expert noted that the SEC may have no choice but to approve the pending ETF applications as there is “political pressure” on the SEC. According to him, the world’s largest asset manager, BlackRock, and its CEO, Larry Fink, are lobbying for their application to be approved.
Lastly, Chervinsky believes that the SEC’s Chair Gary Gensler could use this to spin the anti-crypto narrative by approving these ETFs to show that the Commission is willing to approve products that abode by their regulations.
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Grayscale’s Win Breathes Life Into Litecoin, Post-Halving Rally On?
In a refreshing ruling on August 29, the United States District of Columbia Court of Appeals said the stringent Securities and Exchange Commission (SEC) was, after all, wrong in denying Grayscale to convert their over-the-counter (OTC) Bitcoin Trust (GBTC) into a Bitcoin spot exchange-traded fund (ETF).
The regulator had previously barred the conversion of the GBTC to an ETF, citing an alleged absence of measures to prevent price manipulation, forcing Grayscale to sue. Before this ruling, the presiding judge said SEC needed to elaborate on why they denied Grayscale’s application.
Litecoin Rebounds
Following today’s court statement, Bitcoin prices soared, and the aftermath of this pump has positively impacted Litecoin. As it is, BTC is up roughly 10%, sharply rebounding from around $25,800 support recorded last week. Meanwhile, LTC, the bitcoin “silver,” is up 7% when writing, aiming to reverse losses of August 17.
Litecoin is changing hands at around $70, with a noticeable increment in trading volumes. Typically, in crypto trading, a spike in volumes, regardless of trend direction, can point to engagement and provide a “hint” of traders’ sentiment.
With rising volumes and expanding prices, it could suggest that bulls are positioning themselves for even more gains in the sessions ahead. Meanwhile, sharp losses with increasing volumes may mean bears are unloading, and prices may drop.
Post-Halving Rally On?
The expansion in LTC trading volumes, as visible in the daily chart, could translate to a possible bottom for the digital asset that has been under pressure in the past few sessions. To illustrate, LTC is down 26% in August 2023 alone. This dump is despite news of the Litecoin network halving its miner rewards to 6.25 LTC in early August.
In crypto, halving events has historically been associated with fresh cycles of increasing demand for the underlying coin. For Bitcoin, past performances indicate that the coin tends to rally months after the halving event. Meanwhile, in Litecoin, it has been mixed, but spot prices are generally higher than in 2019 when it halved.
With Grayscale igniting demand in Bitcoin and other proof-of-work altcoins like Litecoin, it is yet to be seen whether bulls will build on this and push prices, especially of LTC, higher. LTC prices are currently trending inside the August 17 bear candlestick.
Technically, this is bearish from volume analysis. A sharp reversal and rally, ideally above $75, peeling back August 17 losses, might catalyze more demand, potentially setting the base for a relieving post-halving rally.
If this is the case, August 17’s losses could be the climactic end of the leg down as LTC establishes a triple bottom at around the $60 and $65 support zone. Previously, LTC found support in this region in March 2023 and December 2022.
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Party In The USA: Ripple Gets Ready To Properly Celebrate Triumph Over SEC
The Ripple community is currently at the edge of their seats after the company’s founder and CEO made announcements to officially host a party to commemorate the cryptocurrency’s triumph against the US SEC.
Hosting A Grand Celebratory Bash
Ripple, a leading global payments network, declared openly on Monday, August 28, its intentions to throw a dedicatory party to honor its win over the United States Securities and Exchange Commission (SEC).
Ripple’s win against the US SEC is not only a positive result for the cryptocurrency, but a significant milestone for the cryptocurrency industry in regards to regulatory clarity and transparency.
It’s understandable the relief the Ripple community feels after going through many hurdles that came with the SEC lawsuit, not just in monetary losses, but in its reputation and position as a cryptocurrency with as much potential as Bitcoin.
Ripple has disclosed some information about the celebratory party on X (formerly known as Twitter). The cryptocurrency firm stated that the party will be hosted in New York City on Friday, September 29, emphasizing to the general public to “save the date” and look forward to a great celebration.
“We’re hosting a community celebration on September 29 in New York City! Stay tuned for more details to come later this week,” Ripple tweeted.
The CEO of Ripple, Brad Garlinghouse also took to X, enthusiastically informing the public of the date of the party and how he looks forward to properly commemorating the cryptocurrency’s victory against the US SEC.
“As promised – it’s time for that proper victory party,” Garlinghouse said. “The last few years have been quite the journey and I look forward to sharing a celebratory toast on Sept 29 in NYC!”
The Spin-Off From Ripple And SEC Lawsuit
Ripple and the US SEC have been embroiled in a lawsuit for years. The SEC first filed a lawsuit against Ripple in 2020, alleging that the cryptocurrency firm was selling unregistered securities in its native token, XRP.
Instead of accepting the SEC’s demands and paying the liabilities, Ripple responded to the allegations by engaging in a legal battle that has been ongoing for about three years.
During those years, Ripple has lost hundreds of millions of dollars in its effort to defend against the SEC’s allegations. Its native cryptocurrency was delisted from several exchanges including Bitstamp. The token also suffered from massive liquidations in the XRP futures contract.
It was only this year that things started turning around for the cryptocurrency after Judge Analisa Torres ruled in favor of Ripple and declared that programmatic XRP sales should not be labeled a security.
XRP sales jumped following Ripple’s partial win against the SEC. The cryptocurrency firm also inked a new partnership with Mastercard and is poised to be listed on Gemini.
Even though the SEC is not too happy with Ripple’s win over the case and has submitted an interlocutory appeal against the cryptocurrency firm, XRP’s price remains somewhat stable. The crypto firm has also remained strong and enjoyed the support of notable cryptocurrency enthusiasts including Pantera CEO, Dan Morehead who labeled Ripple’s victory as a “positive black swan.”
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