Crypto investors are on edge as the SEC’s decision on a Bitcoin BTC/USD ETF looms, with firms such as Fidelity, BlackRock (NYSE:BLK), and Invesco having submitted applications for Bitcoin ETFs. The approval of these ETFs could lead to a substantial influx of capital into Bitcoin. This situation was highlighted by Barron’s on Friday.
Grayscale Investments, which manages a $16.6 billion Grayscale Bitcoin Trust (GBTC), is also looking to convert its trust into an ETF. The SEC has until midnight on Friday to contest its previous court defeat to Grayscale. If the court’s decision holds, it could overturn the SEC’s denial and send the application back for reassessment.
Despite past rejections, SEC Chair Gary Gensler has stressed that they are still reviewing the court’s verdict. During the largest 20,000 BTC sell-off since April, testimony from Caroline Ellison revealed Sam Bankman-Fried’s concerns about Binance, a Saudi price, and Snapchat. A representative from Grayscale confirmed their readiness to convert GBTC into an ETF upon approval.
Earlier on Friday, at Chainlink’s SmartCon conference, Nitin Gaur from State Street (NYSE:STT) expressed optimism for the approval of Bitcoin ETFs despite challenges related to market manipulation concerns. Gaur emphasized that Bitcoin ETFs provide financial institutions with an easy way into the crypto market and an opportunity to supply liquidity.
While he expects an influx of institutional capital to influence Bitcoin’s price, he cautions against straying from Bitcoin’s original goal of establishing an egalitarian system. On the regulatory front, Gaur advocates for an innovative approach that encourages experimentation while preventing catastrophic failures.
He insists that this change depends on public sentiment communicated to elected officials, with lobbying efforts and crypto alliances playing a significant role. He pointed to MiCA in Europe, MAS in Singapore, VARA in Dubai, and FINMA in Switzerland as potential models for U.S. regulation.
Amid regulatory challenges, U.S. crypto companies are prioritizing innovation over new ETFs or tokens, with some considering launching projects overseas. Gaur outlined three potential scenarios for Bitcoin: becoming a global store of value amid worsening geopolitical and economic situations; facing a coordinated regulatory crackdown similar to situations in Argentina and Turkey where the irreversible and deflationary nature of technology allowed users to bypass restrictions; or experiencing stagflation, where nothing substantial changes.
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