SEC's decision to postpone the verdict until September 30 worsened market sentiments.
In a major move, the US Securities and Exchange Commission (SEC) is set take a final call on the nine proposed bitcoin exchange-traded fund (ETF) in the next two months.
The news has not only hit bitcoin as nearly every other cryptocurrency has plummeted losing roughly 5% to 15% in the last 24 hours and have all broken every support level they had found in the last couple of weeks. The SEC received more than 1,300 comments on the proposed rule change as of August 6, it said. However, there are also other Bitcoin ETF applications submitted to the agency.
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"Cryptocurrencies could receive a solid boost and end up becoming the main talking point across financial markets if the SEC approves a Bitcoin ETF in September". He argued that though ETFs can help pump the price momentarily, a campaign for mass adoption would've had a long-lasting effect on the cryptocurrency. What we know, from the Winklevoss ruling, is that the SEC still sees a market that is not mature and with large issues to solve before it can safely be traded as an ETF.
Nonetheless, some analysts are viewing the recent decline as a retrace back to a consolidation price of $6,000 or below, which the digital currency breached on June 24. Since Bitcoin has been created to be an endless resource with a total of 21 Million mineable coins, a higher market capitalization means that the value of a single Bitcoin is going to increase.
"The market overreacted to a slew of applications to the SEC that had no chance of getting a quick acceptance and are now overreacting to the highly expected outcome", said Hany Rashwan, chief executive officer of crypto startup Amun Technologies Ltd. And that, with more time to review, the SEC can analyze the true impact of an ETF, and sort through the public notice and comments that are being directed at it regarded cryptocurrencies.
The SEC's official note on the decision delay can be found here. She explained that her colleagues cited "a number of reasons for that decision, and specifically what I think they did is they looked through to the underlying asset - in this case, that would be bitcoin, and they raised some concerns about the market for that underlying product".
This is VanEck's third attempt to push a bitcoin ETF through.