Will tomorrow's Bitcoin ETF decision cause a pump or a dip?

20 May, 2019
by Will Heasman
Will tomorrow's Bitcoin ETF decision cause a pump or a dip?

The price of Bitcoin has stayed eerily stable since its reprisal back above $8k, it even recently met resistance, testing against $8.2k with relatively little pullback; alongside this it’s recent segment on 60 Minutes - which some believed would cause a pump - had little to no impact whatsoever, so can the SEC’s impending decision upon the VanEck Bitcoin ETF proposal stir anything from the #1?

The security regulator is primed to make its decision on the VanEck Bitcoin (BTC) ETF proposal tomorrow, and with such strong reactions from similar deadlines in the past, it could be likely that we see some kind of outburst from BTC leading up to, or in the aftermath of, any such decision.

Rejection, delay, or proposal?

With the vast majority of BTC ETF proposals either rejected or delayed, it seems unlikely that this time around would be any different.  

This appears to be the prevailing view within the social circles of the crypto community, with anyone left who cares suggesting that it’ll likely result in either a dismissal or a delay.

One person who prescribes to this belief is Jake Chervinsky, the crypto community’s resident lawyer, who posits that if there’s no delay, a rejection is most probable, adding the decision could be a “bad sign for ETF bulls”:

Chervinksy relays that last week the SEC delayed the Bitwise ETF proposal, but not the VanEck proposal. This is unusual in the sense that if the SEC were looking to delay the VanEck ETF, they would have likely announced the delay on the same day as the Bitwise decision (as they have done in the past) rather than waiting until tomorrow. 

This nods to either an outright rejection or approval tomorrow, and in Chervinksy’s view, a rejection is far more likely...

The lawyer listed of a plethora of reason as to why denial is probable, including the numerous past rejections of a BTC ETF, as well as Bitcoins recent volatility, and investigations into fraud and manipulation emanating from the Bitfinex-Tether fiasco.

Moreover, Chervinksy once again points to last weeks’ delay order on the Bitwise ETF, of which grounds for disapproval apply to the entire Bitcoin market structure, which would, of course, include the VanEck proposal.

Does anyone really care? 

For many months, even years, investors have been put on edge, pondering whether or not the SEC will approve a BTC ETF; watching the back and forth of proposal rejection and delay like some kind of regulatory ping pong.

Due to this, the idea of a Bitcoin (BTC) ETF has all but run out of steam in the minds of the crypto community; in essence -  no one really cares either way anymore.

The space has mostly moved past the point of caring simply due to the fact that so much more in the way of bullish development has occurred in the time since the promise of a BTC ETF was raised. Institutional money now has many bespoke avenues into the cryptocurrency ecosystem in the way of Bakkt, Fidelity and other such instruments.

Will the aftermath cause a pump or dump?

In an alternate reality where the VanEck ETF was somehow approved tomorrow, BTC could possibly pump, simply due to the regulatory body effectively approving of the crypto market; again, this is highly unlikely.

The more likely outcome is a rejection, which, if history is anything to go by, could cause a dip. Last time an ETF was denied was back in August 2018, when the SEC rejected 9 ETFs in one go, causing BTC to slip approximately -10% following the decision. 

BTC/USD Chart provided by Tradingview

However, we have to bear in mind that this was a mass denial of ETFs, in a bear market, at a point where the general consensus was that Bitcoin needed an ETF to survive.

We’re in a much better off position these days, seemingly at the start of a bull cycle, with a lot of institutional interest, and a general feeling of apathy towards both the SEC and their decision-making skills...

What do you think? Are we likely to see any fallout from tomorrows decision?

Let us know your thoughts the comments!

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