Cointime

Download App
iOS & Android

What Happens to Bitcoin Price if Spot ETF Isn’t Approved?

By Lyllah Ledesma

  • It's not surprising that analysts expect to see negative short-term price action if a bitcoin spot ETF is rejected by the SEC.
  • Analysts, however, pointed out that bitcoin certainly doesn't hinge its existence on an ETF.

While markets appear to have fully embraced the idea that the U.S. Securities and Exchange Commission (SEC) will approve a spot bitcoin ETF (timing unclear), it's worth considering the chance of continued rejections and what that might mean for the price of the crypto.

It's no surprise that analysts believe there would be at least some negative short-term price impact on SEC rejections, but what to expect following the knee-jerk reaction?

“We could see a move downward and the target could be below $30,000,” said Laurent Kssis, a crypto trading adviser at CEC Capital.

Any decline, Kssis noted, would have to be balanced against other bullish catalysts, such as the approaching halving. “A cluster at $25,000 is highly unlikely unless the SEC is categorical, but I sense it will be a back-to-the-drawing-board situation and hope will still be in the back of everyone's mind.”

“If the ETF doesn't get approved, I anticipate it would be a significant letdown for the market," said Martin Leinweber, a product strategist at MarketVector Indexes. "The spot Bitcoin ETF is often viewed as a hallmark of institutional acceptance and integration into mainstream financial systems."

Leinweber added that a rejection might also trigger some legal turmoil for the SEC, which in June suffered a major court loss when it was ruled the agency was "arbitrary and capricious" in its rejection of Grayscale's attempt to convert its Bitcoin Trust (GBTC) into a spot ETF. The SEC in October notably failed to appeal the ruling, helping to lead to current expectations of coming approvals.

Leinweber notes that bitcoin, as a decentralized entity, certainly doesn't hinge its existence on an ETF, but “a rejection would undeniably cast a bearish shadow on bitcoin’s price in the short term.”

“I believe that the absence of an ETF would impose a substantial drag on the crypto market," he said. "It would necessitate a period of adjustment and realignment, as the market would need to decouple and forge a new narrative moving forward."

Other crypto assets such as ether (ETH) would likely not be immune to these repercussions, according to Leinweber, especially considering that the SEC would next shift its focus to the spot ether ETF applications.

Bullish action goes beyond ETF

“In the case that a spot ETF isn’t approved soon, we believe Bitcoin’s 2024 investment case remains very strong," said Hashdex’s CIO, Samir Kerbage. "More investors are beginning to appreciate the benefits of bitcoin as a store-of-value asset or type ofdigital gold.”

Kerbage also noted that the next Bitcoin halving is approaching and “if history once again rhymes, the price of BTC will react positively to this scheduled reduction in supply."

Comments

All Comments

Recommended for you

  • Farcaster's social client Kiosk completes $10 million financing, led by Electric Capital

    Farcaster's integrated social client Kiosk has announced the completion of a $10 million financing round on the X platform, led by Electric Capital, with participation from a16z Crypto, USV, and Variant Fund. Kiosk aims to promote community building and commerce within applications, enabling creators to establish communities, share rich media content, mint NFTs, interact with like-minded individuals, and seamlessly customize channel economics, while emphasizing the integration of on-chain assets into social interactions and envisioning a more inclusive and interconnected Web3 experience.

  • A whale sold 224 WBTC worth $14.4 million in the past three hours

    According to on-chain analyst @ai_9684xtpa, address 0x486...1505e sold 224 WBTC tokens worth $14.4 million through Cowswap in the past three hours, making a profit of $830,000 (selling at an average price of $64,203). The seller had bought 371 WBTC tokens at an average price of $60,504 between November 2023 and April 2024, and still holds 280 WBTC tokens.

  • CryptoQuant CEO: BTC needs to remain above $80,000 for miners to remain profitable after halving

    Bitcoin mining revenue significantly decreased in May due to the impact of the fourth Bitcoin halving event. On May 1st, the total revenue from block rewards and transaction fees reached a new low of only $26.3 million.CryptoQuant CEO Ki Young Ju calculated that, based on current conditions, Bitcoin needs to stay above $80,000 for miners to remain profitable after the halving. However, most miners have taken proactive measures to upgrade their mining equipment to lower long-term operating costs and remain competitive.

  • BTC returns to above 65,000 USDT, up 2.08% in 24 hours

    OKX market shows that BTC has returned to above 65000 USDT, now reporting 65102 USDT, with a 24-hour increase of 2.08%.

  • Hundre Finance attackers have withdrawn 162.2 ETH worth of crypto assets from Curve

    According to PeckShield monitoring, the attacker of Hundre Finance withdrew 784,000 3Crv from Curve and exchanged it for 273 ETH. In addition, they also exchanged 305.6 WOO, 39 PAXG, 200,000 FRAX, and 100,000 DAI, totaling 162.2 ETH. The attacker then bridged 1,034 ETH (2.17 million USD), 842.8K DAI, 1.11 million USDT, 1.27 million USDC, and 457.3 FRAX from Optimism to Ethereum. They also exchanged a total of 480,000 USDC for 142.6 WETH, 306 WOO, and 39 PAXG. They also exchanged 1.11 million USDT for 500.3 thousand USD worth of DAI and 613.8 thousand USD worth of FRAX. Additionally, on April 15, 2023, approximately 786,000 USD worth of USDC was added to Curve3Pool.

  • LayerZero co-founder: "Self-reporting of witch activities" is not aimed at individuals, but at industrial witch studios

    Bryan Pellegrino, co-founder and CEO of LayerZero, stated on social media that the "Self-Report Sybil Activity" is not targeting individual users, but rather large industrial witch farms (studios).Earlier, LayerZero Labs launched the "Self-Report Sybil Activity" plan, which allows witch addresses to self-report related addresses on a designated page and receive an expected allocation of 15%, without answering any questions. The deadline is May 17th, 19:59:59.

  • Argentina’s House of Representatives Passes Bill to Regularize Cryptocurrency Taxation

    The Argentine Chamber of Deputies has passed a cryptocurrency tax normalization bill aimed at advancing a series of important government reforms. The bill introduces the possibility of regularizing previously undeclared cryptocurrency assets, up to a maximum of $100,000, without paying government collection fees. However, if the value of cryptocurrency assets exceeds this limit, the government will apply preferential tax rates based on the taxpayer's declaration date.

  • GNUS on Fantom was attacked, with a loss of about $1.27 million

    According to Beosin's monitoring, GNUS on Fantom was attacked, resulting in a loss of approximately $1.27 million. GNUS stated on the X platform that due to recent vulnerabilities, hackers were able to mint fake GNUS tokens on Fantom, transfer them to Ethereum and Polygon through the Axelar Bridge, and sell them to existing liquidity pools. We will take a snapshot of the blocks before the exploit. To ensure fairness, please do not purchase GNUS tokens after the exploit, as we will issue new tokens.

  • Pandu Financial Group received the first round of strategic equity investment of tens of millions of Hong Kong dollars, led by Longling Capital

    Pando Financial Group announced it has received tens of millions of Hong Kong dollars in strategic equity investment led by Longling Investment. Pando Financial Group stated that it plans to use the newly injected funds for key growth areas, including market expansion, innovative product development, key talent recruitment, and technology upgrades, aiming to accelerate the layout of opportunities in the era of virtual assets through these strategic initiatives. Currently, the group's asset management scale has reached $500 million. Pando Asset, a subsidiary of Pando Financial Group, established its headquarters in Zurich in 2022 and issued the Pando 6 spot virtual asset fund (Bitcoin/Ethereum spot ETPs) on the Swiss Exchange. Another subsidiary of Pando Financial Group, Pando Limited, obtained licenses from the Securities and Futures Commission in Hong Kong, including Type 1 (securities trading), Type 4 (advising on securities), and Type 9 (asset management), as well as public fund qualifications, and was approved to manage investment portfolios with more than 10% invested in virtual assets and issued several excellent performance actively managed ETF products.

  • Bitcoin opens $63K futures gap as thin liquidity threatens BTC price

    Bitcoin market participants are doubting the staying power of the ongoing BTC price relief bounce.