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

  • Robinhood Chief Legal Officer Dan Gallagher Says He Won't Become SEC Chairman

    According to market news, Dan Gallagher, the Chief Legal Officer of Robinhood, stated that he would not serve as the Chairman of the US Securities and Exchange Commission.

  • Cosine: After a user used GPT to write a bot with a backdoor code, the private key was sent to a phishing website

    SlowMist Yu Xian stated in a post on the X platform that a user used GPT to write a bot with code and sent the private key to a phishing website. The reason why the private key was stolen was because it was directly sent to the phishing website in the HTTP request body. Yu Xian reminded that when using LLM such as GPT/Claude, one must pay attention to the common fraudulent behavior of these LLM. It was previously mentioned that AI poisoning attacks were carried out, and now this is a real attack case targeting the crypto industry.

  • U.S. Supreme Court rejects Facebook's attempt to avoid shareholder securities fraud lawsuit

     US Supreme Court rejected Facebook's attempt to avoid shareholder securities fraud lawsuits under the META umbrella.

  • The final value of the US one-year inflation rate in November is expected to be 2.6%, the expected value is 2.7%, and the previous value is 2.60%

     the expected final value of the US one-year inflation rate in November is 2.6%, with an expected value of 2.7% and a previous value of 2.60%. The expected final value of the US five-to-ten-year inflation rate in November is 3.2%, with an expected value of 3.1% and a previous value of 3.10%.

  • Polymarket Blocks French Users Amid Government Investigation into Gambling Law Compliance

    Polymarket has blocked users from France following reports of an investigation by the country's gaming authority for compliance with gambling laws. The ban was not stated in Polymarket's terms of service, but French users attempting to access the website using a VPN from a French server were met with a digital blockade. The ANJ, France's national gaming authority, began investigating Polymarket after a French trader placed large bets on Donald Trump winning the 2024 US Presidential election.

  • U.S. stocks open, most crypto stocks open lower

     the US stock market opened with the Dow Jones up 0.19%, the S&P 500 up 0.05%, and the Nasdaq up 0.01%. Most cryptocurrency stocks opened lower, with Coinbase (COIN.O) down 0.06%, MicroStrategy (MSTR.O) up 0.4%, and Riot Platforms (RIOT.O) down 2.6%. Previously, Bitcoin had risen above $99,000 before falling back.

  • Amazon to invest an additional $4 billion in Anthropic, OpenAI's rival

     Amazon is deepening its cooperation with Anthropic and will add an additional $4 billion investment to the company. In September of this year, Anthropic, an artificial intelligence startup, was seeking a new round of financing with a valuation of up to $40 billion. Anthropic was founded by former OpenAI executives in 2021 and focuses on creating interpretable, secure, and controllable artificial intelligence systems. The company's flagship AI model, Claude, operates based on "Constitutional AI," which uses predefined principles to guide its output, avoiding some erroneous or discriminatory output reactions.

  • Family Offices Evolve into Powerful Investment Entities with Innovative Strategies and Advanced Technologies

    Family offices, which traditionally focused on conservative investment strategies, have transformed into powerful investment entities with a focus on alternative investments, private equity, co-investments, venture capital, and impact investing. This shift has been driven by innovative financial solutions and modern investment strategies, responding to technological advancements and an evolving global financial landscape. Family offices are taking a more active role in direct investments and co-investments, particularly in high-growth companies and startups, enhancing their control and flexibility. They are also diversifying further into private markets and real assets due to geopolitical and macroeconomic uncertainties, while embracing innovative financing solutions and cutting-edge risk management techniques. Additionally, family offices are implementing AI technologies to improve their decision-making processes, particularly in investment analysis, reflecting their commitment to innovation and strategic planning.

  • The Evolution of Family Offices: Embracing Innovative Investment Strategies and Technology

    Family offices have shifted from conservative investment strategies to more active roles in direct investments and co-investments, thanks to innovative financial solutions and modern investment strategies. They are now leaders in alternative investments, private equity, co-investments, venture capital, and impact investing, leveraging their capital through non-recourse and limited-recourse financing to expand their investments across sectors and regions. Family offices are also adopting sophisticated risk management strategies, diversifying further into private markets and real assets, and integrating advanced technologies such as AI-driven platforms to enhance decision-making processes. A family office in the UAE, International Venture Investments Holding, takes an active investment approach, emphasizing operational autonomy and forming dedicated management teams for specific projects. The UBS Global Family Office Report 2024 shows that 78% of family offices plan to invest in generative artificial intelligence in the next two to three years.