Cloud Hosting

09/06 update below. This post was originally published on September 5

BitcoinBTC, ethereum, XRPXRP and other major cryptocurrencies could be headed into one of their biggest-ever months that one crypto watcher has said will be "crazy."

Subscribe now to Forbes' CryptoAsset & Blockchain Advisor and successfully navigate the bitcoin and crypto market rollercoaster

The bitcoin price has crashed after a summer rally, falling back even as a China earthquake appears on the horizon, with the price of other major cryptocurrencies including ethereum and XRP, also falling back after a "black swan" failed to materialize.

Now, former U.S. Securities and Exchange Commission (SEC) chair Jay Clayton has said eventual approval of a spot bitcoin exchange-traded fund (ETF) is "inevitable" following the SEC punting a decision on ETF filings from asset managers who look after a combined $15 trillion until October.

It's at the start of a bull run you need up-to-date information the most! Sign up now for the free CryptoCodexA daily newsletter for traders, investors and the crypto-curious that will keep you ahead of the market

"It is clear that bitcoin is not a security. It is clear that bitcoin is something that retail investors want access to, institutional investors want access to, and, importantly, some of our most trusted providers who are fiduciaries or have duties of best interest want to provide this product to the retail public. So I think [...] an approval is inevitable," Clayton told CNBC. "The dichotomy between a futures product and cash product can't go on forever."

The SEC approved a bitcoin futures ETF in 2021, with the bitcoin, ethereum, XRP and crypto market peaking at just over $3 trillion when the first fund launched.

Last week, the SEC said it needs more time to decide on the recent flurry of spot bitcoin ETF applications, pushing back decisions on filings from BlackRockBLK, WisdomTree, Invesco Galaxy, Wise Origin, VanEck, Bitwise and Valkyrie Digital Assets at least mid-October.

Spot bitcoin ETF hype had built among traders ahead last week's decisions following crypto asset manager Greyscale's legal victory over the SEC in which a court ruled some of the regulator's arguments in rejecting spot bitcoin ETF applications seemed "arbitrary and capricious," forcing the SEC to reexamine Greyscales proposal to convert its flagship GBTC fund to a fully-fledged spot bitcoin ETF.

The odds of a spot bitcoin ETF approval by the end of 2023 were raised from 65% to 75% by Bloomberg Intelligence analysts in the aftermath of Grayscale's victory.

09/06 update: Grayscale has called on the SEC to approve the proposed conversion of its bitcoin trust to a fully-fledged spot bitcoin ETF following its legal victory.

"Now that the Court of Appeals has spoken, there is no available rationale that would distinguish a bitcoin futures [exchange-traded product] from a spot bitcoin ETP under the legal analysis previously adopted by the Commission in rejecting spot bitcoin ETPs," Joseph Hall, a lawyer at Davis Polk representing Grayscale, said in a letter filed with the regulator.

"We hope you will agree that the best use of resources now is for the [SEC] to issue an order approving" the product, Hall wrote, arguing the approval of a futures bitcoin ETF with a market surveillance arrangement via the Chicago Mercantile Exchange should be sufficient for a spot bitcoin ETF. "If any other reason could be offered in attempting to differentiate" the two types of products "we are confident that it would have surfaced by now."

The SEC will have no choice but to approve the spot bitcoin ETF applications following Grayscales victory in its case against the SEC, according a note written by JPMorgan analysts seen by The Block.

Sign up now for CryptoCodexA free, daily newsletter for the crypto-curious

To defend its denial of Grayscales proposal of converting its bitcoin trust into an ETF, the SEC would have to retroactively withdraw its previous approval of futures-based bitcoin ETFssomething that would be "very disruptive and embarrassing for the SEC," JPMorgan's analysts led by Nikolaos Panigirtzoglou wrote.

Meanwhile, Bernstein analysts have said a spot bitcoin ETF approval could be quickly followed by an ethereum fund due to its similar market structure.

"The crypto ETF opportunity wont stop at just bitcoin (BTC), but will extend into multiple crypto assets," Bernstein analysts led by Gautam Chhugani wrote in a note seen by Coindesk.

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported on how technology is changing business, political trends, and the latest culture and lifestyle. I have covered the rise of bitcoin and cryptocurrency since 2012 and have charted its emergence as a niche technology into the greatest threat to the established financial system the world has ever seen and the most important new technology since the internet itself. I have worked and written for CityAM, the Financial Times, and the New Statesman, amongst others. Follow me on Twitter @billybambrough or email me on billyATbillybambrough.com.Disclosure: I occasionally hold some small amount of bitcoin and other cryptocurrencies.

Read the rest here:
Approval Is InevitableSEC Insider Primes Crypto Market For $15 Trillion Bitcoin, Ethereum And XRP Price ETF Game-Changer - Forbes