Written by Matteo Greco, Research Analyst at Fineqia International (CSE:FNQ).
Bitcoin (BTC) closed last week around $26,000, a 0.5% decrease in price from its previous week’s closing price of $26,100. The week was eventful, with Grayscale winning a lawsuit against the SEC. The court ruled that the SEC’s rejection of the Grayscale Bitcoin ETF application was arbitrary and capricious, lacking adequate explanations for the rejection. The SEC will reevaluate the application and provide a new verdict in due time.
Following the court decision, the market saw strong rebound, with BTC reaching over $28,000 before returning to the $26,000 level, similar to the trading price before the lawsuit announcement. While the Grayscale win caused short-term volatility, the decision about whether Grayscale or other digital asset managers will be able to list a Bitcoin Spot ETF has not been determined.
The Grayscale victory resulted in a narrowing of the Grayscale Bitcoin Trust (GBTC), reaching 16% before stabilizing around 20%, the lowest discount recorded in 2022. This narrowing confirms investors’ increased confidence in the potential conversion of the trust into an ETF.
The SEC announced a delay in their decision regarding the rejection or approval of Bitcoin Spot ETFs. Several applications met their first deadline, with the second deadline scheduled for October. The final deadline for these applications is mid-March 2024.
The SEC’s decision did not cause significant market movement, as it was widely expected and already priced in. Investors anticipate the SEC to delay their decision as long as possible, likely pushing the final outcome to the fourth and last deadline.
In contrast to the US, Asia continues to create a friendly environment for digital asset businesses. Countries in Asia have expressed a strong desire to become digital asset hubs, with actions supporting this goal.
Binance, the world’s largest digital asset exchange, launched its Japan subsidiary in August, allowing customers to trade 34 digital assets and planning to increase the number to 100.
SEBA Bank, a Switzerland-based cryptocurrency bank, received an approval-in-principle from Hong Kong’s securities regulator, becoming the fourth entity to receive approval.
Asia and Europe are striving to capture a larger share of the digital asset market amidst increased uncertainty in the US. The situation is leading to a capital flight from the US to other jurisdictions, pending a clear decision on ETF listings and exchange lawsuits.