Bitcoin investment funds or Bitcoin ETFs, which the U.S. Securities and Exchange Commission (SEC) is reluctant to support, have been the main topic for the cryptocurrency industry for many months. The SEC’s refusal creates distrust among investors toward Bitcoin. Today, we discuss this with the guest of Fortrader magazine, leading analyst at RoboForex, Dmitry Gurkovsky.
— Hello, Dmitry. Bitcoin today is on the verge of updating its lows. The reason is the SEC’s delay in deciding on the ETF. Could you explain why the Commission’s decision is so important for the cryptocurrency market?
— Good afternoon, Yulia. The U.S. Securities and Exchange Commission (SEC) is considering the issue of listing Bitcoin ETFs. This process is lengthy and complex: first of all, because there is still no unified opinion in the United States on classifying Bitcoin as an asset, currency, or some intermediate substance. Previously, the SEC stated that Bitcoin is neither the first nor the second, so it is not subject to regulation and is effectively outside the law. Considering the Bitcoin ETF issue means the Commission could allow funds based on cryptocurrency investments to operate.
This is important because the key issue now is not so much bringing cryptocurrency to a fundamentally new trading level, but confirming that this asset is not speculative by nature. So far, ProShares and other companies that initiated this review have not been able to prove that the market can withstand manipulation. However, much is still ahead.
— Do you think the SEC will ultimately grant approval? And why?
— There is a chance that the SEC will issue a positive decision, but there is also a high probability that it will be very narrow, allowing only one ETF to be listed. It is currently important for regulatory authorities to be confident in the absence of opportunities for manipulating cryptocurrency prices. Once these gates are open, progress will accelerate significantly.
The SEC’s refusal to ProShares means only that the main discussion is still ahead.
— How will this affect Bitcoin’s price and the digital coin industry as a whole?
— A positive decision (in the global sense) will allow cryptocurrencies to grow, while a negative one will temporarily halt Bitcoin and altcoin purchases due to likely trust issues with virtual currency.
— What do you see as Bitcoin’s price if the SEC grants approval and if it does not?
— If the SEC issues a positive decision, Bitcoin and altcoins will rise in price—at least locally. A negative decision will force investors to sell or, at best, sit out without moves and wait for market stabilization.
For Bitcoin, the price range could be very wide: 4,500 – 8,500 USD over the next 3 months, for example. It is worth remembering that with a trigger, cryptocurrency prices can change much faster than traditional fiat assets.
