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In the ever-evolving world of cryptocurrencies, all eyes are on the United States Securities and Exchange Commission (SEC) as it once again hits the brakes on making a decision regarding spot Bitcoin ETF applications. The anticipation has reached a fever pitch as firms like Blackrock, Invesco, Valkyrie, and Bitwise eagerly await the regulatory green light.
This latest postponement was announced recently, following an intense congressional hearing where SEC Chairman Gary Gensler faced a barrage of questions. These companies originally submitted their spot Bitcoin ETF applications back in June 2023, and the initial decision to delay came late in August of the same year. It's important to note that the SEC's decision to initiate proceedings should not be seen as a sign of any conclusions regarding the matter at hand.
The timing of this delay is particularly intriguing, as it comes hot on the heels of Chairman Gensler's appearance at a US Congressional hearing on September 27th. During the hearing, Gensler maintained his cautious stance on the crypto market, pointing out concerns he had regarding how crypto companies handle customer funds. He raised the specter of the commingling of funds, suggesting that such practices could lead to undesirable outcomes.
Gensler's comments during the hearing were especially noteworthy, given that they followed a court hearing involving Sam Bankman-Fried, the former CEO of the now-defunct crypto exchange FTX. The exchange's collapse in November 2022 sent shockwaves through the crypto world, as reports emerged indicating that its exchange token, FTT, comprised a substantial portion of its balance sheet. Additionally, allegations of funds being commingled between Alameda and FTX made headlines during the exchange's bankruptcy process.
While Chairman Gensler acknowledged that Bitcoin does not fall under the category of security, he refrained from definitively classifying it as a commodity. He also revealed that the commission has yet to act on the court's order related to its decision on Grayscale. This crypto asset management company had attempted to transform its GBTC into a spot Bitcoin ETF, a move that was initially rejected by the SEC. Subsequently, a judge deemed this rejection as "arbitrary and capricious."
Amid all these regulatory twists and turns, the Bitcoin market itself is experiencing its own ebbs and flows. Notably, Bitcoin's price has seen an uptick in the last 24 hours, with on-chain data from Santiment showing that wallets holding between 10 to 10,000 BTC currently boast the highest holdings seen in 2023. This surge suggests a high level of confidence in the cryptocurrency market. Speculation runs rampant about whether this is tied to the hopeful expectation of favorable developments surrounding spot Bitcoin ETF approvals in 2024.
As the crypto world holds its breath, the SEC's decision to delay not only Blackrock and Bitwise filings but also the Invesco filing on September 28, 2023, adds to the growing uncertainty. Four of the seven applications for spot ETFs have faced delays, leaving market participants eagerly awaiting the regulator's ultimate decision.
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