ETF-triggered "BTC extreme drawing door": Grayscale wins the lawsuit and goes straight to $2.8, SEC postpones the resolution and breaks through $26,000

Original | Odaily Planet Daily

Author | Loopy Lu

On August 30, Grayscale won a lawsuit with the SEC. The market soared in response, and Bitcoin once broke through 28,000 US dollars. With Grayscale's judicial victory, people have high hopes that "the United States will soon approve a spot bitcoin ETF", and the "magnificence" of the encryption world seems to be within reach.

However, within 48 hours of the good news that Huidu won the lawsuit, another sudden change occurred.

The U.S. Securities and Exchange Commission stated today that they need to postpone the approval time of Bitcoin spot ETFs, and at least three spot ETFs proposed by WisdomTree, Valkyrie, and Invesco have been postponed. Delaying product decisions until at least mid-October.

Tomorrow after tomorrow, so many tomorrows

This is not the first time the SEC has delayed a Bitcoin ETF recently.

In mid-June, BlackRock submitted an application for a Bitcoin spot ETF, sparking clear bullish sentiment in the cryptocurrency market. In late July, the SEC began reviewing whether to approve or reject the listing applications of six Bitcoin spot ETFs, including BlackRock. (Note from Odaily Planet Daily: Specifically including BlackRock iSharesBitcoinTrust, Fidelity Wise Origin Bitcoin Trust, WisdomTree Bitcoin Trust, VanEckBitcoin Strategy ETF and Invesco GalaxyBitcoin ETF.)

Generally speaking, the SEC will officially start the review when it is published in the Federal Register. The review period is only 45 days by default. However, the review period can be extended.

Therefore, postponing the audit results has become a "tried and proven" trick for the SEC.

This year's "ETF wave" can be traced back to ARK of "Sister Wood". Back on May 15, the ARK 21SharesBitcoin ETF was published in the Federal Register. BlackRock, which manages more than $9 trillion, applied for a Bitcoin ETF in June, which sparked a wave of excitement in the industry for a while. The SEC published the fund proposal in the Federal Register on July 19, starting a 45-day countdown for the commission to rule on the product.

However, the SEC has not made a decision on these ETFs until now.

On August 11, the SEC once again extended the review time for the Bitcoin ETF applications of Ark Investment Management and 21Shares. According to the SEC's review rules, the review can be postponed for up to 240 days.

Of course, the ETF application that was postponed again today is similar. The SEC filing states that the ETF application for WisdomTree has been postponed to October 17.

! [The "BTC extreme painting gate" caused by ETF: Grayscale won the lawsuit and went straight to $2.8, and the SEC postponed the resolution and broke through $26,000](https://img-cdn.gateio.im/resized- social/moments-69a80767fe-2ee76bd8f3-dd1a6f-6d2ef1)

The SEC seems to be just trying its best to delay making a final decision, without giving a specific reason for the delay. "The Commission believes it is appropriate to specify a longer period for taking action on the proposed rule changes to allow it sufficient time to consider the proposed rule changes and the issues raised therein."

The market is falling and the market direction is confusing

As the SEC continues to be postponed, the market has once again made pessimistic predictions for the broader market.

According to Coinglass data, in the past 24 hours, Bitcoin’s liquidation was 48.89 million US dollars, and ETH’s liquidation was 28.76 million US dollars.

In the longest review period of 240 days, there are some critical nodes where decisions have to be made: 45 days, 45 days, 90 days, 60 days. **If the SEC postpones 3 times, it will have to make a final decision-approval or rejection. After 240 days, the SEC will no longer be able to postpone the decision according to the process. **


The change in market expectations also allowed the K-line trend to draw a perfectly shaped "gate", and the price of Bitcoin fell below $26,000 at one point. People can't help but wonder, when will the ETF matter be settled?

Long before this postponement, some analysts had predicted the occurrence of this postponement. Bloomberg analyst James Seyffart said on Aug. 15 that he thought the early September review deadline might not see the results of the review. He believes the review is bound to be delayed and is more concerned about the final deadline of January 10.

Grayscale won the lawsuit, and the giant whale made a profit

From the perspective of market trends, Grayscale's victory is a high point in the current round of ETF narratives that have strongly stimulated the market.

But as the facts gradually became clear, people began to wonder, is Grayscale’s victory really a victory for BTC? Although Grayscale won a legal victory against the SEC, it does not mean that Grayscale GBTC is allowed to be converted into a spot ETF.

Bloomberg TV analyst Sonali Basak said: “This does not mean that GBTC will automatically and immediately convert into an ETF. As the court said, it only means that the US SEC failed to explain why it approved the Bitcoin futures ETP and not Grayscale The proposed product (spot ETF)." She added that there is still a long process to go, including a 45-day appeal period, when both parties will review the ruling, and the SEC can also request a plenary hearing. “It is unclear whether Grayscale will need to resubmit its application to convert GBTC into an ETF.”

Simply put, the court just thinks that the SEC's process of rejecting Grayscale is not in compliance with the rules, nothing more. After going through the review process again, the SEC can still use other reasons to reject Grayscale's application again. But such a piece of ambiguous news has brought a strong stimulus to the market.

And when we put our perspective back to before Grayscale won the lawsuit, it is not difficult to find that in the few days before winning the lawsuit, the giant whale was constantly making plans and making huge profits.

Santiment monitoring data shows that wallets holding 10-10,000 BTC increased their holdings of nearly $400 million in BTC the day before the news of Grayscale’s victory was announced. Although there is a lack of evidence, people still suspect that whale addresses may have prior knowledge of the outcome of Grayscale’s lawsuit with the SEC based on trading operations.

Grayscale's victory seems to have created an opportunity for the giant whale to leave. Before Grayscale won the case, nearly 30,000 BTC were transferred to CEX, worth $822 million at market prices.

On August 29, Markus Thielen, research director of Wu Jihan’s crypto financial company Matrixport, said, “We will be long on Bitcoin and strictly stop losses. It is expected that U.S. Treasury bond yields will fall and U.S. technology stocks will rise.”

“buytherumor,sellthe news”

It is always dangerous to trade following the news. It is difficult for people to react immediately to the news as soon as it is revealed.

In just 48 hours, the market experienced another ups and downs and fell back to its starting point. A group of giant whales may have made profits, while another group of retail investors have experienced large liquidations.

Eric Balchunas, senior ETF analyst at Bloomberg, doesn't think he would be surprised if the SEC delays ETF applications. In his view, the timetable for the review period was not important. "It is still possible that the SEC will make concessions at some point, and we will eventually see these applications approved." He predicted that the probability of a bitcoin spot ETF launching this year is 75%, and the probability of launching it by the end of 2024 at the latest is as high as 75%. 95%.

As the impact of ETFs comes to an end, the market is once again heading toward pessimism. Although many people believe that the approval of a spot Bitcoin ETF may bring a huge boost to the market, this event is still too far away from us.

As the day progresses into September, our markets are once again headed for negativity. Historically, September has been the worst month for Bitcoin. From 2013 to the present, there have only been two (2015, 2016) Septembers when Bitcoin completed a monthly profit, and the rest of the years were losses.

Perhaps, we still need to be more patient with the trend of the broader market. There are no potential major positive events expected in September, and in October, the potential approval of the Ethereum futures ETF may be the next major event that drives the market. **