- Cryptocurrencies have been hit hard by yet another delay of a decision on a Bitcoin ETF.
- A delay does not mean a rejection, and there are now two more critical dates to watch.
- An upwards move could start ahead of these dates.
Ethereum was struggling with $400, and now the ETH/USD is around $350. Ripple, the weakest link in recent months began its free-fall with the XRP/USD getting close to $0.30 after trading above $0.40. And Bitcoin is trading closer to $6,000 than to $7000. What seemed to be only a correction in the BTC/USD price now looks like a full turnaround.
The latest hammer to fall is not very different from the previous ones, and it is related to one thing: Exchange-traded fund (ETF). Digital coins previously suffered from a rejection of an ETF request, such as that of the Winklevoss brothers. This time, it is a delay, and not for the first time. The SEC was planned to deliver its verdict on the VanEck ETF this week but decided to postpone it. Hopes for approval were priced in, and when no approval came, cryptos crashed.
Nevertheless, it is important to remember that a delay is not a rejection. Taking more time can result in a more in-depth consideration that may go either way. It may even be seen as a positive: instead of outright rejection, the US regulatory body is taking this request seriously.
What we do know for sure is that the approval or disapproval of an ETF is critical for Bitcoin and other cryptos. To familiarize yourself with the matter, see:
Bitcoin ETF explained: 9 questions and answers about the critical crypto catalyst
So when will we know? The verdict on the VanEck ETF is now scheduled for September 30th. After such a significant pushback, it is hard to see how another delay is possible.
And there is another date to circle before September 30th. On September 21st, the SEC will decide on the Direxion request, which was also postponed.
Between mid-August and late September, there is a lot of time. What will happen to cryptocurrencies during this time? Given the length of time, things may get worse before they get better. A few more weeks of more downs than ups cannot be ruled out.
But markets do not wait patiently for the news to arrive. Prices of Bitcoin, Ethereum, Ripple, and others may begin rising in anticipation of a positive outcome. Speculation may be based on new information or as it often happens in markets, without any reason.
What are the odds of approval? Nobody knows for sure, but many see quite a bit of progress in the field, with Coinbase leading the charge with solutions that make Custody and Liquidity more robust and agreeable to the authorities. So, nothing is certain, but the chances are rising. May see the recent rejections and delays as a loss of a battle, but not a failure of the war.
Which cryptocurrency will gain most? Looking at the recent past, the No. 1 digital coin will likely be the biggest beneficiary. Most ETF proposals focus only on Bitcoin. Also, looking at recent price action, we see that Bitcoin is down to levels last seen in June while Ethereum and Ripple have set new lows for the year.
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