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⚡Bitcoin About to Explode,Is the World Ready?💣

Croxroad

06 Sep 2023 — 5 min read

☕️ GM Dear Plebs!

Here is Crox Road, your daily dose of orange pill that will turn you into a Bitcoin Maxi.

The menu for today:

🤏 Spot Bitcoin ETFs Shine Brighter Than Predicted

A senior analyst named Velte Lund believes it's a risky move not to buy Bitcoin (BTC) aggressively when its price is at the current levels. In other words, Velte Lund thinks it's a good opportunity to invest in Bitcoin, and not doing so would be a bold decision with potential consequences.

The analysts from a Bitcoin research firm called K33, which used to be called Arcane Research, believe that the impact of approving a Bitcoin (BTC) exchange-traded fund (ETF) on the cryptocurrency's price is much bigger than what most people in the crypto market think. They think that if such an ETF gets approved, it could significantly increase the price of Bitcoin, and this potential increase is not being fully recognized by the market right now.

In a market report dated September 5th, K33's senior analyst Vetle Lunde and vice president Anders Helseth pointed out that over the past three months, the likelihood of a spot Bitcoin ETF being approved has significantly increased. However, they noticed that this positive sentiment hasn't had an impact on the prices of Bitcoin and other major cryptocurrencies, meaning that the market hasn't fully acknowledged the potential positive outcome of such an ETF approval.

The analysts are saying that even though Bitcoin's price dropped after Grayscale's legal win against the Securities and Exchange Commission (SEC), if a spot Bitcoin ETF gets approved, it would likely bring in a lot of new money and boost buying interest, driving prices up. On the flip side, if the ETF is rejected, they believe it won't have much of a negative impact, and Bitcoin would continue as usual without a significant price drop.

Lunde and Helseth are saying that because the chances of spot ETF approvals have gone up, and some Bloomberg analysts even predict a 75% chance of approval within the year, the current view of the market regarding ETFs is fundamentally wrong. In other words, they believe the market is underestimating the likelihood of ETF approvals happening soon.

To back up their optimistic forecast, the analysts pointed out a recent 2% increase in the Nasdaq-100 index, which is known for reflecting the broader market's willingness to take on risk. This gain in the Nasdaq-100 suggests that investors are becoming more willing to invest in riskier assets, which could bode well for Bitcoin and other cryptocurrencies.

🤬 SEC Pressured by Grayscale After Legal Win

Grayscale Investments, a company that deals with cryptocurrencies like Bitcoin, asked the U.S. Securities and Exchange Commission (SEC) to give the green light to their plan for a type of investment fund called an exchange-traded fund (ETF) that would follow the price of Bitcoin. This request comes after Grayscale won a legal battle against the SEC.

Last week, a group of three judges from the District of Columbia Court of Appeals in Washington decided that the SEC made a mistake when it said "no" to Grayscale's idea for a Bitcoin ETF without giving a clear explanation of why they said no. This legal case was important for the Bitcoin world, and when the news came out, it briefly caused the price of Bitcoin to jump up by almost 7%.

So, because of the court's decision, the SEC has to take another look at Grayscale's request for the Bitcoin ETF. However, the SEC still has the option to challenge or dispute the court's decision if they want to. As of last week, the SEC mentioned that they were examining the court's ruling.

Grayscale's lawyers, a law firm called DavisPolk, sent a letter to the SEC on Tuesday. In that letter, they basically said, "We think it would be the smartest move for the SEC to just give the green light to our Bitcoin ETF now, instead of dragging this out." They're essentially asking the SEC to approve their product without further delay.

A spot Bitcoin ETF is like a way for investors to benefit from the value of Bitcoin without actually having to buy and hold Bitcoin itself. The SEC, which is the government agency responsible for regulating financial markets, has said "no" to all the requests for spot Bitcoin ETFs. They're concerned that the people asking for these ETFs haven't proven that they can make sure investors won't be taken advantage of through shady practices in the Bitcoin market, like price manipulation. A perfect world!

The SEC approved Bitcoin futures ETFs with market surveillance from the CME. Grayscale argued its spot ETF should be approved too, as both rely on Bitcoin's price and use similar surveillance. The court agreed, saying the SEC didn't explain why they treated them differently.

DavisPolk, Grayscale's law firm, is saying that if there was any good reason to treat these two products differently, it would have been brought up already.

🌊 Transparent

You see, blockchains work in a way that anyone can check and follow the money being sent from one place to another. It's like using a special tool called a "blockchain explorer" on the internet. This tool lets you watch real-time as money is moved around on the blockchain.

What's cool about this is that it's open and clear for everyone to see. It's like having a window into all the money movements, and because of this, it's really hard for people to do sneaky or dishonest stuff with the money. So, it's a system that's liked by investors because it's trustworthy and free from corruption.