Welcome back to your daily Block Explorer crypto roundup. Today we’ll dive into the upcoming bitcoin ETF decision. First, let’s take a look at the market overview:
Bitcoin finally cracked $6,500 in a blistering overnight session on Wednesday. The total crypto market capitalization jumped $12 million in an hour with Bitcoin up more than 4%.
1. Bitcoin – $6,680 (+ 4%)
2. Ethereum – $285 (+ 1.1%)
3. XRP – $0.34 (+ 2.3%)
The rise across the crypto market appears to coincide with BitMEX (a crypto trading platform) shutting down for maintenance.
Why did that impact the price? BitMEX allows traders to bet against crypto prices. When trading was halted, anyone betting against bitcoin (with a ‘short position’) had their trades liquidated, which forced the price up.
Biggest winner and loser in the top 20
Biggest winner – Vechain (+ 10%)
Biggest loser – NEM (- 0.83%)
Tomorrow’s ETF decision: what do you need to know?
Despite last night’s jump in prices, the crypto market has been in pause-mode lately. We’re waiting for the SEC (Securities and Exchange Commission) to make a decision on another Bitcoin ETF.
What’s an ETF?
An ETF is an ‘exchange traded fund.’ It tracks the underlying price of a commodity (like gold), an index (like the S&P 500) or a basket of stocks.
ETFs makes it much easier for the average investor to put money into the market.
A bunch of companies are now trying to introduce the first bitcoin ETF. First, the Winklevoss twins had their ETF rejected by the SEC in July.
Then, a second ETF proposal from VanEck and Solid X – which was considered more likely to get approval – was delayed until the end of September.
In both cases, the SEC decisions triggered huge losses on the crypto market. A bitcoin ETF is widely seen as a catalyst for “institutional money” to flood into crypto, so a rejection is a set back.
Thursday’s Bitcoin ETF decision
Tomorrow, the SEC will make a decision on the ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF. This time the SEC cannot delay or push back the ruling. We’ll see a decision, whether it’s yes or no.
What will happen?
The most likely outcome is another rejection. The SEC continues to push back against bitcoin ETFs, citing volatility and lack of regulation.
It’s also worth noting that the ProShares ETF is based on Bitcoin ‘futures’, whereas the more promising VanEck ETF is based on physical bitcoin.
It’s a small but important distinction. Futures are contracts in which traders agree to buy or sell bitcoin on a certain date. The physical bitcoin ETF is rooted in bitcoin’s live price.
Check back in 2019…
Most experts don’t think we’ll see a bitcoin ETF until 2019, but tomorrow’s decision could still surprise us. A Bitcoin ETF is coming. It’s just a case of when.
We’ll update you with the outcome when we hear more. That’s all for today’s roundup. See you back here tomorrow.
Today’s further reading: SEC Rejects Winklevoss Bitcoin ETF, Here’s Why it Doesn’t Matter.
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