If there is anything that is expected from the crypto industry, it’s the fact that it involves large price swings. If you could remember a few weeks ago, Bitcoin was able to reach $8,500 when people were anticipating an SEC-approved Bitcoin ETF.
For many, the decision by SEC to delay a decision on the proposed Bitcoin ETF created a panic among crypto investors. Bitcoin is slipping close to $6,000 after this announcement. However, whether or not it’s a good decision, it really depends on what your goal is. Are you looking for a quick buck or two? Then perhaps, it’s a good decision to sell Bitcoin now to cut your losses.
However, if you are going to ask the Founder and CEO of cryptocurrency investment firm BKCM, Brian Kelly, he believes that you should be holding on your cryptos. He mentioned that “If you’re selling today after this decision, it’s the wrong way to do crypto investing. There is more to this story than just an ETF”. He also added that “A little spoiler alert: On September 30th, they will likely postpone it again because the market’s not ready for it and the SEC hasn’t had all the answers to their questions yet”.
Altcoins Also Bearish
Aside from Bitcoin, altcoins also suffered large losses. Ethereum, for instance, not only has failed to match Bitcoin’s rise in July. And also, Ethereum sustained a 10% loss right after the SEC announcement of postponing its decision on crypto-related ETFs. ETH is only trading at around $361 which is around the same level last April, the cryptocurrency’s lowest.
Both IOTA and EOS are among the altcoins that have lost the most after the announcement losing over 17%. On the other hand, Ripple lost 16.3%.
Since the entire market is down, the total market cap for the industry today is at $229 billion. This was last seen in November of last year.
How Can an ETF Affect Bitcoin?
In 2003, it was the first time that the world has seen an ETF that was backed by gold. It was responsible for pushing the price of gold by 300% in the next decade. A Bitcoin ETF could play a major role in inviting institutional investors to get involved in the market in a safer way. This means that institutional investors could eliminate the risks associated with crypto exchanges.
If you ask Tom Lee, he believes that Bitcoin is going to reach $22,000 this year. Among the things necessary to make this prediction come true include regulatory clarity and the involvement of institutional investors in the niche.
However, since the commission needs a longer time to come up with a decision, will this prediction still come true? According to the agency when it rejected the Winklevoss’ Bitcoin application, “The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change”.
Among the concerns of the SEC is price manipulation. And this could actually be true. There were reports that have suggested price manipulation within the niche.