One trader cautioned, ‘This doesn’t guarantee Grayscale immediate ability to launch a Bitcoin spot ETF, nor does it predict future approval.
Bitcoin (BTC) witnessed a notable 7% surge on Tuesday, breaking free from a prolonged period of stagnation. This abrupt price movement was prompted by the optimism surrounding the potential approval of the long-debated Grayscale Bitcoin spot ETF in the United States, following a recent court ruling.
A federal appeals court has issued a directive for the U.S. Securities and Exchange Commission (SEC) to “reconsider” its rejection of the trust issuer’s request to transform the Grayscale Bitcoin Trust into an exchange-traded fund (ETF). This development has raised the possibility of a spot bitcoin ETF becoming a reality in the U.S., despite the SEC having previously rejected all ETF applications of this nature that have come before it.
However, despite the widespread celebration in the market, there are those who maintain a degree of caution, tempering the current excitement among crypto enthusiasts.
Matteo Greco, a research analyst at Fineqia International (CSE: FNQ), expressed this sentiment, stating, “Grayscale has been granted the opportunity to have their filing re-evaluated by the SEC due to concerns of unfair rejection raised by the judge. Nevertheless, it doesn’t guarantee that Grayscale will gain 100% approval to list a spot Bitcoin ETF, nor does it assure this will happen in the future.”
He emphasized the positive impact of this development on the market but also pointed out that the final decisions regarding Grayscale’s ETF listing remain pending. Greco highlighted the presence of approximately 2.5 million bitcoins held at a short-term loss, which could pose challenges in the coming months.
Taking a broader perspective on the digital asset market, Greco noted, “When examining the entire digital asset market, trading volume remains notably low. The combined volume on centralized exchanges for the month of August stands at around $400 billion, the lowest figure since December 2020.”
Some individuals, however, see the federal court’s decision as the initial steps toward a shifting regulatory landscape rather than an outright approval.
Guilhem Chaumont, co-founder of trading firm Flowdesk, commented, “Although this ruling doesn’t guarantee the immediate approval of the first US Bitcoin ETF, it aligns with a pattern of legal escalation between regulators and digital asset players who have been presenting compelling arguments to support their case.”
So, even though this may not mark the conclusive conclusion of this case, it wouldn’t be unexpected to witness this as the initial entry in a sequence of favorable updates regarding regulatory acceptance in the US,” Chaumont further remarked.
In this context, individuals holding bitcoin for the long term have continued to amass these tokens, despite a recent billion-dollar market shakeout. This steadfast accumulation indicates that traders maintain a bullish perspective for the long run, irrespective of the current market stagnation.
Additionally, it appears that these long-term holders are maintaining their spot positions, opting not to engage in active trading or utilize their bitcoin as collateral. This insight was shared by analysts at the cryptocurrency exchange Bitfinex on Tuesday.
