“This is No Time for Bitcoin ETF Hopium,” How Would a Delay or Denial Affect the BTC Price?


  • The probabilities: Delay: 75.0%, Denial: 24.9%, Approval: 0.1%
  • The delay means BTC price would continue to push up

    Last week, the Bitcoin ETF proposal was delayed by SEC yet again and now the decision is pending for VanEck proposal.

    Back on February 15 and 20, Bitwise and VanEck proposals were published in the Federal Register. This month, they were both coming up on their 90-day deadlines for SEC to approve, deny or delay.

Why Not announce Delay At The Same Time, Like Always

Talking about the 90-days deadline, Jake Chervinsky, the crypto resident lawyer shared how important this is.

If the SEC decides to delay the ETF, Chervinsky points out, the regulator has to explain its “grounds for disapproval under consideration.” Once SEC provides its reasons for the disapproval, the ETF sponsor and other interested parties can submit the response.

However, what’s unusual is that only the Bitwise proposal for Bitcoin ETF has been delayed but no decision has been made on VanEck. It’s unusual because in the past the SEC has typically bundled together all of its decision on Bitcoin ETFs, announcing them on the same day.

Previously, SEC issued delay on both Bitwise and VanEck in March while last year, three different proposals were denied on the same day.

So, Chervinsky explains if the SEC were planning to delay VanEck proposal, it would have done so last week with Bitwise. The fact that it wasn’t done suggests the SEC will either deny or approve VanEck’s Bitcoin ETF.

Denial Far More Likely than Approval

The denial is more likely the decision than approval says Chervinsky. As for why,

“I'd be shocked if the SEC approved the first ever bitcoin ETF after six years of denials without taking all the time allowed by law. Moving slowly makes the SEC appear thoughtful & thorough.”

He further says the final deadline of this proposal is October 18 so an early decision means denial. Moreover, market conditions don’t support any early approval as recently we saw investigations related to fraud and manipulations and volatility ramping up.

“Most importantly, the Bitwise delay order issued Tuesday basically forecloses early approval,”

Cherbinksy said. The grounds for denying Bitwise falls for denying VanEck too.

But then, why delay one and deny others, Chervinsky explains that two EFs are different in the way that they calculate price differently.

Impact of Bitcoin ETF Decision on the Price

However, to be fair, it is possible this means nothing and SEC staff just didn’t have the time to finish the VanEck order delay yet.

“I still think delay is the most likely result. VanEck should have a chance to address the SEC's grounds for disapproval just like Bitwise does & I think VanEck's proposal is every bit as worthy of the SEC's consideration. But if it's not a delay, all signs point to denial.”

Crypto trader and investor Josh Rager further clarifies on delay,

“Expected outcome is a delay with likely minor impact on the price (slight pullback to support which is bought up). Even with delay BTC could continue to push up in the coming weeks to new yearly high.”

In case, we get a rejection, it would “likely result in a great opportunity to buy the dip,” says economist and crypto trader Alex Kruger. If by some off chance, Bitcoin ETF gets an approval, Kruger says,

“Approval = Buy at Market.”

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