JPMorgan Anticipates SEC Approval of Spot Bitcoin ETFs After Grayscale's Victory

(adsbygoogle = window.adsbygoogle || []).push();

Source: iStock/pichet_w

The US Securities and Exchange Commission (SEC) will likely be forced to approve multiple spot Bitcoin (BTC) exchange-traded fund (ETF) applications following the recent Grayscale victory. 

In a Friday note, JPMorgan analysts led by Nikolaos Panigirtzoglou wrote that Grayscale’s win implies that the SEC would have to retroactively withdraw its previous approval of futures-based Bitcoin ETFs in order to defend its denial of Grayscale’s proposal of converting its Bitcoin trust into an ETF. 

However, such a move would be “very disruptive and embarrassing for the SEC” and appears unlikely, the analysts said, adding:

“It looks more likely that the SEC would be forced to approve the spot bitcoin ETF applications that are still pending from several asset managers, including that from Grayscale.” 

Last week, the US Court of Appeals for the District of Columbia Circuit ruled in favor of Grayscale, ordering the SEC to set aside its earlier rejection of Grayscale’s application and reopen the review process.

The court ruled that there was no justification for the SEC to allow Bitcoin futures-based ETFs but deny spot Bitcoin ETFs.

It claimed that fraud and manipulation in the Bitcoin spot market pose a similar risk to both futures and spot products because the spot market and the CME futures market are tightly correlated. 

Therefore, the SEC’s rejection of Grayscale’s proposal was “arbitrary and capricious” because the agency failed to explain its different treatment of similar products, the court ruled.

SEC Could Approve Multiple Spot Bitcoin ETFs At Once

The SEC said last week that it would delay decisions on spot Bitcoin ETFs proposed by several firms, including BlackRock, Fidelity, and Invesco, until at least mid-October. 

However, JPMorgan analysts argued that the postponement “likely points to approval of multiple spot bitcoin ETF applications at once rather than granting a first-mover advantage to any single applicant.”

“That could be beneficial for investors as it would allow for more competition in terms of ETF fees. Grayscale will likely face even bigger pressure to lower fees if its trust gets approval to be converted to the largest bitcoin spot ETF in the world.”

The SEC has consistently cited inadequate cross-exchange market surveillance, as well as concerns of fraud and market manipulation, as reasons why it has not yet approved a Bitcoin spot ETF. 

Meanwhile, wealth management firm Bernstein has also said that the recent Grayscale victory over the SEC will pave the way for a spot Bitcoin ETF approval.

In a recent research report, the broker noted that the win marks the second huge victory for the industry following Ripple’s partial win last month.

Likewise, Bloomberg analysts Eric Balchunas and James Seyffart have said that the win may trigger a catalytic effect, expediting the launch of Bitcoin ETFs by 95%.

“Spot bitcoin ETFs have a 75% chance of launching by the end of this year and 95% by the end of 2024,” the duo wrote in a post on X.

(adsbygoogle = window.adsbygoogle || []).push(); #JPMorgan #Anticipates #SEC #Approval #Spot #Bitcoin #ETFs #Grayscales #Victory

SEC's Stance, TeraWulf's BTC Surge, and Grayscale's Pending ETF Decision

(adsbygoogle = window.adsbygoogle || []).push();

Bitcoin’s recent performance shows a marginal dip of less than 0.10%, trading at $29,380 as of Tuesday. 

This subtle fluctuation in Bitcoin’s price can be attributed to several underlying factors. 

Foremost among them is the sentiment expressed by former SEC Chairman John Reed Stark, who opines that the present SEC is likely to reject Bitcoin ETF’s spot approval. 

In parallel, TeraWulf has reported an upsurge in its self-mined BTC for Q2, and in another development, Hut 8 is contemplating a merger with USBTC.

Industry insiders are also keenly awaiting a potential decision on Grayscale’s Bitcoin ETF, which is anticipated to be announced this week.

Industry expert predicts Bitcoin ETF approval denial by SEC

The BTC/USD’s downward trend may be due to former SEC attorney John Reed Stark’s insights. 

He suggests that the SEC’s current administration is hesitant to approve Bitcoin spot ETFs due to concerns about market manipulation and dependency on a small group for network maintenance. 

This speculation aligns with historical SEC denials of Bitcoin ETFs based on similar reasons. 

Stark also speculates that a GOP-led administration might take a more crypto-friendly stance after the 2024 presidential election, potentially easing ETF approval.

Bitcoin Mining Update: TeraWulf and Hut 8’s Merger Consideration with USBTC

The recent increase in self-mined BTC by US-based mining firm TeraWulf during Q2 2023, attributed to expanded mining capacity and higher hash rate, may have contributed to the downward momentum in Bitcoin. 

This boosted their quarterly revenue by $4 million to $15.5 million.

During Q2 2023, Hut8’s mid-year performance showed a decline in hash rate and self-mined Bitcoin. 

The company extracted 399 BTC, marking a 58% drop from Q2 2022. This decrease was attributed to heightened Bitcoin mining difficulty, the pause in operations at the North Bay Facility, and persistent electrical problems at the Drumheller site. 

Hut 8 anticipates a boost in its hash rate capacity upon finalizing its anticipated merger with US Bitcoin.

Grayscale Bitcoin ETF Decision Expected This Week, Experts Say

Traders are anticipating the approval of Grayscale Bitcoin ETF. Historical court timelines suggest that the resolution is likely to come around August.

Bloomberg’s James Seyffart suggested August 15 as a plausible decision date, which might be helping keep Bitcoin losses limited for the day. 

Additionally, industry figures like Cathie Wood and Nate Geraci have expressed their support for Grayscale against SEC.

Bitcoin Price Prediction 

Examining Bitcoin from a technical perspective, its movement has been relatively stagnant, fluctuating between the upper boundary of $29,600 and the lower threshold of $29,250, as evident on the two-hourly chart. 

This period presents a volatile session for the BTC/USD currency pair. A breach of this specified range is expected to dictate Bitcoin’s ensuing price trajectory.

Should Bitcoin dip below the $29,250 mark, it would likely find its next support at approximately the $29,000 level. 

This would not only signify the perpetuation of a bearish trend but also expose Bitcoin to a subsequent support level at $28,750. 

Bitcoin Price Chart – Source: Tradingview

Conversely, a bullish surge past the $29,600 threshold has the potential to push Bitcoin’s valuation toward $29,800. 

Beyond this, the next significant resistance stands at the psychological barrier of $30,000. 

A continued bullish trend could further propel Bitcoin towards a resistance level of $30,200—a mark that previously acted as a resistance on August 8. 

This level is anticipated to cap any significant bullish momentum in the near future.

In summary, traders should closely monitor the $29,250 and $29,600 levels to strategize based on potential price movements.

Top 15 Cryptocurrencies to Watch in 2023

Explore our meticulously chosen collection of the top 15 digital assets to stay up to date on the latest initial coin offering (ICO) projects and alternative cryptocurrencies in 2023. 

This expertly curated list is brought to you by Industry Talk and Cryptonews, providing you with professional recommendations and valuable insights. 

Keep pace with the constantly evolving world of digital assets by discovering the potential of these cryptocurrencies.

Find The Best Price to Buy/Sell Cryptocurrency

Cryptocurrency Price Tracker – Source: Cryptonews

Disclaimer: Cryptocurrency projects endorsed in this article are not the financial advice of the publishing author or publication – cryptocurrencies are highly volatile investments with considerable risk, always do your own research.

(adsbygoogle = window.adsbygoogle || []).push(); #SECs #Stance #TeraWulfs #BTC #Surge #Grayscales #Pending #ETF #Decision

SEC Junks Grayscale's Filecoin Application Over 'Security' Label

(adsbygoogle = window.adsbygoogle || []).push();

Filecoin, a decentralized storage platform based on blockchain technology, has recently found itself entangled in a regulatory debate as the United States Securities and Exchange Commission (SEC) raises concerns over its classification as a security. 

Grayscale Investments, a prominent digital asset management firm, has been instructed by the SEC to withdraw its application for a Filecoin Trust, citing potential securities implications.

Grayscale’s intent to launch an updated Filecoin Trust product was initially disclosed through a Form 10 application submitted to the SEC on April 14. However, in a recent announcement, Grayscale revealed that the regulatory body has expressed reservations about Filecoin’s categorization, asserting that it could fall under the definition of a security.

Grayscale Pushes Back Against SEC Filecoin Securities Claim

Grayscale has revealed that it received a comment letter from the SEC on May 16. In the letter, the regulatory body cautioned that Filecoin (FIL), the underlying asset of Grayscale’s proposed Filecoin Trust, meets the criteria for being classified as a security under federal law. As a result, the SEC requested that Grayscale withdraw its application for the trust product.

The intended transformation of Grayscale’s existing Filecoin Trust into a more public company-like entity, as outlined in the Form 10 application, would have entailed the filing of quarterly reports detailing the financial activities of the trust. However, the SEC’s recent warning has cast doubt on the regulatory viability of such a structure.

In response to the SEC’s assertion, Grayscale expressed a differing viewpoint. According to the firm, Filecoin should not be classified as a security under federal securities laws. Consequently, Grayscale intends to promptly submit a detailed explanation to the SEC staff, outlining the legal basis for its position.

SEC Definition Of Securities; Implications For Crypto Industry

The comment letter received by Grayscale Investments from the SEC sheds light on the regulator’s perspective regarding the classification of Filecoin (FIL) as a security. 

The SEC’s definition of securities is crucial in determining the regulatory framework and compliance requirements for various financial instruments. 

BTCUSD below the crucial $28K region. Chart: TradingView.com

Securities, as per federal law, encompass a broad range of tradable financial assets, including stocks, bonds, and investment contracts, which are typically subject to specific disclosure and registration regulations. 

The implications of the SEC’s position extend beyond the specific case of Filecoin and Grayscale Investments. It remains to be seen how this particular case will play out and what implications it will have for the broader regulatory approach to cryptocurrencies and blockchain-based assets.

-Featured image from Depositphotos

(adsbygoogle = window.adsbygoogle || []).push(); #SEC #Junks #Grayscales #Filecoin #Application #Security #Label

Grayscale's hearing sheds light on the SEC's decision-making process

(adsbygoogle = window.adsbygoogle || []).push();

Ad

During the first appeal hearing for Grayscale’s Bitcoin spot ETF, judges raised concerns about the SEC’s reasoning, stating that the SEC had not sufficiently explained why Grayscale’s arguments were flawed. They also questioned the logic of allowing futures-based Bitcoin ETFs while not approving spot-based ETFs.

What is the significance of investors receiving shares in a trust compared to a Bitcoin ETF traded in real-time?

What is an ETF

Exchange Traded Funds (ETFs) are a specific type of Exchange Traded Product (ETP) that trade on exchanges and typically follow a specific index. Investing in an ETF gives you access to a bundle of assets that can be bought and sold during market hours. This can potentially reduce risk and exposure while also diversifying a portfolio.

Bitcoin ETFs are collections of assets related to Bitcoin traded as ETFs on traditional exchanges by brokerages. These ETFs allow investors who are hesitant to invest in cryptocurrencies to access them without owning them.

When Bitcoin’s price surged to thousands of dollars, direct investment in cryptocurrency became difficult for retail and average investors. Brokerages began developing Bitcoin exchange-traded funds to cater to the growing demand for investor access to Bitcoin. The Winklevoss brothers were among the first to file applications for approval with the Securities and Exchange Commission (SEC) in 2013.

The Securities and Exchange Commission (SEC) has not granted approval for any Bitcoin ETFs that hold Bitcoin as an asset. Instead, it has approved Bitcoin ETFs connected to Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME).

Key takeaways about Bitcoin ETFs

Bitcoin futures ETFs are legal, spot ETFs are not

Bitcoin ETFs allow more people to invest in Bitcoin without the expenses and hassles of buying it.

ETFs eliminate the need for security procedures and excessive funds and offer a familiar investment type.

An ETF removes the risks of storing keys as investors own shares of the fund instead of owning cryptocurrency.

Bitcoin’s high prices make it difficult for average investors to purchase 1 BTC, but ETFs allow exposure to BTC within budget, risk tolerance, and investing goals.

Investing in Bitcoin ETFs can be done through brokers or advisors. Several Bitcoin ETFs are available on exchanges such as NYSE ARCA and Nasdaq, including BITO, BTF, XBTF, and BITS.

Spot versus futures ETF

In Greyscale’s spot ETF appeal hearing, judges are questioning the logic of how a futures ETF is possible but not a spot.

The debate lies in the fact that ETPs typically track assets that are regulated and thus protected from price manipulation. Given that Bitcoin is not formally regulated as a commodity or security, the SEC has argued that only Bitcoin futures are acceptable for any type of ETP as futures are regulated by the Commodity Futures Trading Commission (CFTC), an independent agency of the US government.

According to Grayscale’s lead counsel Don Verrilli, the SEC’s refusal to approve their spot Bitcoin ETF application was arbitrary, as the regulator has already approved futures-based ETPs. Verrilli argued that both types of ETPs are derived from the price of Bitcoin and are essentially the same. Verrilli also stated that Grayscale is seeking regulation and is searching for a way forward.

(adsbygoogle = window.adsbygoogle || []).push(); #Grayscales #hearing #sheds #light #SECs #decisionmaking #process

Algorand MyAlgo thefts continue; Grayscale's ETF case proceeds

(adsbygoogle = window.adsbygoogle || []).push();

Ad

The biggest news in the cryptoverse for March 7 saw Algorand face criticism over its insufficient response to a third-party wallet breach. Meanwhile, Grayscale defended its rejected Bitcoin ETF conversion in court. Federal Reserve chair Jerome Powell commented on permissionless ledgers. Plus, research on USDT.

CryptoSlate Top Stories

Algorand blasted over inaction on ongoing wallet drain hack

ZachXBT blasted Algorand’s failure to “acknowledge” an ongoing wallet drain hack.

The self-described “on-chain sleuth” said the Algrorand users had lost millions of dollars in the attack. Yet the project is continuing to drag its feet in helping those affected. “How about you clowns actually acknowledge the ongoing attack stealing millions from community members and assist them.“

On Feb. 27, wallet providers MyAlgo posted a critical advisory recommending all users withdraw funds from Mnemonic wallets stored in MyAlgo.

The post acknowledged “recent hacks” and stated the attack’s root cause is still unknown.

Judges question SEC’s logic during Grayscale’s first Bitcoin spot ETF appeal hearing

Federal appellate court judges questioned the SEC’s arguments during the first appeals hearing on March 7 and asked the regulator’s lawyer what more Grayscale Investments needs to offer to satisfy its requirements regarding a spot Bitcoin ETF.

Chief Judge Sri Srinivasan and Judges Neomi Rao and Harry Edwards of the District of Columbia Circuit Court of Appeals in Washington, D.C., presided over the hearing.

Grayscale lead counsel Don Verrilli told judges that the SEC’s rejection of the company’s spot Bitcoin ETF application was “arbitrary” because the regulator has approved futures-based ETPs and argued that there is no difference between the two as they are both derived from the price of Bitcoin.

Fed Chair Powell addresses concerns over permissionless distributed ledgers in Senate hearing

Federal Reserve chair Jerome Powell spoke on March 7 in front of a Senate Banking, Housing and Urban Affairs Committee.

During the hearing, he was questioned by Senator Cynthia Lummis (R-Wyoming) about permissionless distributed ledgers and whether they had any place within the financial system.

Powell said: “There are real concerns about permissionless public blockchains, and the reason is that they’ve been so susceptible to fraud, to money laundering and all of those things. I think what you heard from the federal banking agencies in one of their reports was that they would tend to look at those as inconsistent with safety and soundness.”

On stablecoins, Powell said that with “appropriate regulation,” they could merge with traditional banks.

China’s WeChat starts accepting CBDC payments

China’s most popular social networking application WeChat expanded its payment options by adding the country’s Central Bank Digital Currency (CBDC), according to Forkast News.

WeChat’s payment arm, WeChat Pay, currently has over one billion monthly active users, as reported by Forkast News. The platform only allows digital yuan payments for specific transactions, such as McDonalt’s orders and bill payments. WeChat is also expected to enable direct digital yuan transactions between its users in the near future.

With this decision, WeChat Pay became the second platform that supports the digital yen. The first platform was Alibaba Group’s Alipay application, while WeChat Pay is currently owned by Alibaba Group’s main competitor Tencent Holdings.

Vitalik Buterin token dump sends unsolicited altcoins price down including CULT

Ethereum (ETH) co-founder Vitalik Buterin dumped several unsolicited altcoins (sh*tcoins) during the early hours of March 7, leading to the value of these assets falling.

On-chain analyst Lookonchain reported that Buterin sold 50 billion MOPS, 500 trillion SHIK, and 10 billion CULT tokens for 439.25 ETH.

Blockchain security firm PeckShield corroborated this report and added that the ETH co-founder sold 3.4 million BITE tokens for 4.9 ETH. The firm said Buterin deposited 214 ETH to an EthDev address.

Despite his sales, Etherscan data showed that Buterin still holds 666 SHIK and 10 billion CULT tokens.

Binance’s PoR system shows over $63B in reserves backing 24 assets

Binance, one of the world’s largest crypto exchanges, updated its proof-of-reserves (PoR) system to include 11 new tokens. These include Mask Network (MASK), Dogecoin (DOGE), Curve DAO Token (CRV), 1inch (1iNCH), and more.

According to the March 7 update, Binance’s PoR system now reflects the reserves held for the added new tokens in addition to the 13 previously added. The total reserves for the 24 assets on Binance exceeded $63 billion as of March 1.

USD Coin (USDC) had the highest reserve ratio at 54,90.54%. Binance held $3.55 billion worth of USDC, while users have a net balance of $64.7 million worth of assets.

Binance USD (BUSD) had the second-highest reserve ratio at 128.81%, while BNB (BNB) followed at a close second at 123.85%.

Research Highlight

Research: Tether shines as leading stablecoin in evolving market

Following the FTX disaster in November, the stablecoin market has significantly changed, losing $12 billion in value.

More recently, the issue was compounded by troubles at BUSD as the New York Department of Financial Services (NYFDS) ordered Paxos to cease token issuance.

Glassnode data analyzed by CryptoSlate showed Tether has emerged as the clear winner in the market restructuring, despite ongoing, long-running suspicions about the token’s ability to meet its liabilities.

Crypto Market

In the last 24 hours, Bitcoin (BTC) fell 1.31% to trade at $22,109.80, while Ethereum (ETH) was down 1.03% at $1,549.80.

Biggest Gainers (24h)

Mask Network (MASK): +10.27%

Everscale (EVER): +9.07%

TrueFi (TRU): +8.7%

Biggest Losers (24h)

OKB (OKB): -8.76%

RSK Infrastructure Framework RSK Infrastructure Framework (RIF): -7.61%

Threshold (T): -7%

(adsbygoogle = window.adsbygoogle || []).push(); #Algorand #MyAlgo #thefts #continue #Grayscales #ETF #case #proceeds

Judges question SEC's logic during Grayscale's first Bitcoin spot ETF appeal hearing

(adsbygoogle = window.adsbygoogle || []).push();

Ad

Federal appellate court judges questioned the SEC’s arguments during the first appeals hearing on March 7 and asked the regulator’s lawyer what more Grayscale Investments needs to offer to satisfy its requirements regarding a spot Bitcoin ETF.

Chief Judge Sri Srinivasan and Judges Neomi Rao and Harry Edwards of the District of Columbia Circuit Court of Appeals in Washington, D.C., presided over the hearing.

SEC explanation needed

Grayscale lead counsel Don Verrilli told judges that the SEC’s rejection of the company’s spot Bitcoin ETF application was “arbitrary” because the regulator has approved futures-based ETPs and argued that there is no difference between the two as they are both derived from the price of Bitcoin.

Verrilli further told the panel of judges that Grayscale wants to be regulated and is looking for a path forward.

Meanwhile, SEC lawyer Emily Parise said that Grayscale’s argument is an “unsupported empirical leap” and the 99% correlation between the spot and futures markets does not prove causation. Parise argued that the onus to prove causation lay on Grayscale and that the company had not provided sufficient “data” to alleviate its concerns.

However, Judge Neomi Rao said that Grayscale has provided a lot of information on how the two markets function with each other, but the SEC has not accepted the company’s reasoning.

Rao added that it seems the “SEC has to explain why they [Grayscale] are wrong in the evidence that they have proffered” in regards to a spot Bitcoin ETF being the same as a futures ETF.

Parise said that the SEC has “very clearly” laid out a way for Grayscale to satisfy its concerns by showing that the spot Bitcoin market prices do not lead the futures market prices. However, the commission found that the path laid out by Grayscale was “inconclusive” despite looking at numerous other studies. She added:

“The evidence is just mixed at this point, it’s bi-directional sometimes, it depends on what period of time you’re looking at.”

Judges questioned how the SEC approved futures ETFs under the Tookrium order but cannot apply the same reasoning to a spot ETF.

The logic

Judge Rao said that the SEC has previously concluded in the Tookrium order that futures prices are led by spot and that any fraud and manipulation on the spot market can be “adequately addressed on the futures market as its a regulated one.”

She asked Parise why the SEC then went on to reject the spot ETF application and why the reasoning does not extend to a spot ETF. Rao asked:

“What’s the logic behind it?”

Parise said there is a lack of evidence and data and the regulator is not confident that fraud and manipulation could be prevented the same way it is for futures products.

Judge Rao also asked Parise if the judges disagreed with the SEC’s stance would the regulator approve the spot ETF or cancel its previous approval of a futures Bitcoin ETF?

Parise said that she could not answer that question on behalf of the SEC.

Posted In: Featured, Legal

(adsbygoogle = window.adsbygoogle || []).push(); #Judges #question #SECs #logic #Grayscales #Bitcoin #spot #ETF #appeal #hearing