- Recent developments by the U.S. Securities and Exchange Commission (SEC) indicate a potential impact on the upcoming crypto bull market.
- A potential approval of a spot Bitcoin ETF in the U.S. could dramatically influence the entire crypto market.
Despite the substantial losses sustained in 2022, the crypto market has seen a remarkable recovery this year, with Bitcoin (BTC) soaring over 80% YTD. With many altcoins even outpacing this performance, the industry buzz is rife with speculations about the end of the bear market and the dawn of another bullish cycle.
Interestingly, the potential catalysts of this bull market might not be confined to BTC’s scheduled halving or the market’s natural cycles. Rather, it seems the U.S. Securities and Exchange Commission (SEC), an ostensibly unlikely player, might have a significant role in fueling this anticipated surge.
The Ripple Effect of SEC Actions
As one of the most influential regulators in the world’s largest economy, the SEC’s decisions undeniably cast long shadows over the crypto market. The Commission’s legal actions against Ripple in late 2020, followed by similar pursuits against Coinbase and Binance, significantly impacted the prices of various digital assets.
However, the SEC’s role is not solely that of a market disruptor. A recent development, where Judge Analisa Torres ruled in favor of Ripple in an SEC lawsuit, stands testament to this. The judge’s decision, asserting that nearly all XRP sales did not qualify as security transactions, had an immediate and significant positive impact on the prices of XRP and other altcoins.
Given these circumstances, if the SEC were to lose its ongoing cases against industry giants Coinbase and Binance, we could potentially see a notable market upswing.
The Potential of a Spot Bitcoin ETF
The SEC’s decisions also have substantial implications on the possibility of a spot Bitcoin exchange-traded fund (ETF) in the U.S. Over the last decade, the regulator has consistently rejected such applications from several entities, including Grayscale, Ark Invest, and Fidelity.
However, the scenario shifted in mid-June when BlackRock, the world’s largest asset manager, filed for a spot Bitcoin ETF. This move, replicated by other companies, and BlackRock’s impressive track record with ETF applications (575 approved to just 1 declined), induced a notable rise in Bitcoin’s price, pushing it past $30,000 for the first time in several months.
While the SEC initially dismissed the recent applications as “inadequate,” BlackRock and other applicants revised their filings. Recently, the SEC has accepted BlackRock’s application, thus instigating the official review process.
Although this process might be lengthy, the eventual approval of a spot Bitcoin ETF in the U.S. could result in a massive, immediate impact on the entire market. After all, BTC did reach its current ATH of $69,000 amid the approval of the first futures BTC ETF in the U.S. back in late 2021.