There was a sigh of relief when bitcoin did not immediately react to the announcement by the SEC to delay their decision on approving the CBOE ETF proposal but, this was short-leaved, since a couple of hours later the price plunged by around 7%.
Bitcoin ETFs have offered great prospect to the market since bitcoin went mainstream but so far, the SEC has either denied or delayed to approve every proposal that has landed on their desk.
The SEC has delayed this particular decision until September 31 and while some might say this was a good sign and that it meant they were deliberating on approving it, the market has been pessimistic of the news.
Are Bitcoin ETFs Absolutely Imperative To Bitcoin’s Success?
Before the announcement by the SEC hit the market, bitcoin had just managed to track back its way to above $7,000 and was trading just a little shy of $7,100, having found a support level at $6,900.
Prices had tested this level for a couple of hours on Sunday before the bullish market regained control and pushed it back above $7,000. Again, of Monday the prices fell below $7,000-in spite of having hit the $7,100- but held well above $6,900.
In the early hours of Tuesday, prices were picking up and steadily bitcoin was trading just above $7,100. Around the time the SEC announced on their delayed approval, all seemed well and the market was looking like it was going to hold up and ignore the news. However, what happened next no one could predict.
Bitcoin began to plummet fast and hard, for the next couple of hours, bitcoin had broken the $6,900 support level and followed to bottom at $6,487. Fortunately, bitcoin found this as its new support level as it steadily climbed back to settle at around $6,500 where it is currently dancing around.
The news has not only hit bitcoin as almost every other cryptocurrency has plummeted losing roughly 5% to 15% in the last 24 hours and have all broken every support level they had found in the last couple of weeks.
At the time of press, Ethereum was around $368, EOS was at $6.03, Ripple was at 0.3500, all representing a massive loss since their recently found 2-month high. The market cap at the time of press had fallen to just above 231 billion, a new low since November 2017.
Currently, experts are split on the role bitcoin ETFs’ approval plays in the long-term success of bitcoin. Co-founder of Ethereum, Vitalik Buterin, following the Winklevoss Bitcoin ETF rejection took to social media to speak out on the ‘much emphasis placed on ETFs’;
“I think there’s too much emphasis on BTC/ETH/whatever ETFs, and not enough emphasis on making it easier for people to buy $5 to $100 in cryptocurrency via cards at corner stores. The former is better for pumping price, but the latter is much better for actual adoption.”
However, given the recent price plummet, it would seem that there is really need for much emphasis on bitcoin ETFs and a real need for a bitcoin ETF to be approved. According to other analysts, bitcoin’s long-term success is tied to the approval of ETFs and is the only catalyst that can push prices to their all-time high of $20,000 and possibly beyond.
Clearly, the bitcoin ETFs approval decision is one that cannot be ignored. Its approval could send the prices to the moon and like it has shown in the last couple of hours its rejection or delay sends the prices plummeting in ways we cannot predict.