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Will The SEC Approve A Bitcoin FuturesBitcoin ETF In 2021? Here Are The Implications

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Rumors are flying. The SEC could approve a Bitcoin Futures ETF before the year ends. It seems like the US Security And Exchange Commission will not give the go-ahead to the mythical Bitcoin ETF just yet… or ever, but a new option has a few companies salivating. What does this mean? And why a Bitcoin Futures ETF before one for the asset itself? That’s what we’re here to explore.

But first, why is the SEC hesitant about approving the Bitcoin ETF? Investopedia responds:

“The reason is that bitcoin, the largest cryptocurrency in the world by market capitalization, remains largely unregulated. Additionally, the Securities and Exchange Commission (SEC) is hesitant to allow an ETF focused on the new and largely untested cryptocurrency market to make its way to the public.”

If that’s true, what makes us think that a Bitcoin Futures ETF is not only possible, but imminent? Well, last month The SEC Chairman Gary Gensler told the Aspen Security Forum:

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“I anticipate that there will be filings with regard to exchange-traded funds (ETFs) under the Investment Company Act (’40 Act). When combined with the other federal securities laws, the ’40 Act provides significant investor protections.

Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded Bitcoin futures.”

Is A Bitcoin Futures ETF What US Investors Want?

Since Gary Gensler sent such a clear signal, the financial world responded in unison. 

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“At least four asset managers have filed for ETFs that invest in bitcoin futures after Securities and Exchange Commission chair Gary Gensler earlier this month indicated that he could approve such funds. But investors may not want them in lieu of physically backed bitcoin ETFs, analysts have said.”

According to Investopedia, “A bitcoin ETF mimics the price of the digital currency, allowing investors to buy into the ETF without trading bitcoin itself.” However, who’s interested in ETFs when bitcoin, the asset, is widely available? Some investors or groups simply can’t invest in bitcoin because their own internal rules won’t allow them to. They can’t purchase bitcoin through a brokerage account. No financial institution backs it, so no one protects them. And, of course, there’s the feared volatility.

Bloomberg explains how Bitcoin fixes this:

“A Bitcoin ETF could help get around those restrictions since the format is more widely accepted. “There are all sorts of custody and regulatory hurdles for big financial institutions to jump through,” said Ross Mayfield, investment strategy analyst at Robert W. Baird & Co. “If it were offered in an ETF, it clears a lot of that up for financial institutions.”

However, it appears that the SEC won’t approve one any time soon. Why would they approve a Bitcoin Futures ETF instead? Bloomberg continues:

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“For the SEC’s purposes, Bitcoin futures also offer an additional level of security because they are governed by the Chicago Mercantile Exchange and require investors to put down cash on margin to trade, as a form of collateral.”

BTCUSD price chart for 09/27/2021 - TradingView
BTC price chart 09/27/2021 on Coinbase | Source: BTC/USD on TradingView.com

Experts And Important Players Disagree

While some companies can’t wait for the Bitcoin Futures ETF to be available, others are less enthusiastic. One of those is Michael Sonnenshein, CEO of Grayscale Investments. His company is one of the many that applied for a Bitcoin ETF and are still waiting for approval. In a recent CNBC interview, he said:

“It would be shortsighted of the SEC to allow a futures-based product into the market before a spot product,” Sonnenshein told CNBC’s “Squawk Box” on Tuesday. “They really should be allowing both products into the market at the same time and let investors choose which way they want.” 

Of course, he’s heavily invested in this outcome. His company’s Grayscale Bitcoin Trust is incredibly successful, but if they manage to turn it into an ETF, it might go parabolic. However, he’s not the only one that thinks that way. In the Bloomberg article, another expert elaborated on the Bitcoin Futures ETF ‘s limitations:

“With futures-based products, you introduced additional cost, more complexity, you have futures contracts that have to be rolled,” said the ETF store’s Geraci. “It’s just a sub-optimal option for investors.”

In any case, the Bitcoin Futures ETF approval is just speculation. Gary Gensler said he looked forward to reading his staff’s review of the fillings, which is not a guarantee by any stretch of the imagination.

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Garlinghouse Speaks About XRP Based ETF ! XRP Price Sees no Action!

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Ripple Price Action

The price of Ripple has been static for the previous week, disappointing investors. The price of XRP bounced between $1 (support) and $1.16 (resistance) multiple times, forming a descending triangle. 

Nonetheless, due to the compression against the downtrend resistance line, the approaching week offers more intriguing price movement. The anticipation is that price will break away from the blue apex of this formation, signalling a shift in trend.

Until then, XRP will be caught between the resistance and support levels. Due to the MACD moving to the negative side this week, the indicators predict a bearish bias. 

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However, it is too early to predict that XRP would plummet to lower levels unless the price breaks below the $1 support level. 

At the time of writing, XRP is trading at $1.08 down by 2.3% in the last 24 hours. 

An XRP based ETF?

The chief executive, while speaking to Fox Business with Charles Gasparino, among other things also spoke about the possibility of having an XRP based ETF.

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When asked about the possibility of an XRP ETF in the United States, he simply stated

Garlinghouse, on the other hand, gave an indirect response to the issue rather than explicitly answering it.

The Securities and Exchange Commission (SEC) has finally approved Bitcoin Futures ETFs in the United States. More ETFs of this type are expected to appear in the near future, according to experts. 

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According to Garlinghouse, because Bitcoin consumes so much energy, prioritising it is incompatible with the SEC Chair’s climate objective. The executive, who has often criticised Bitcoin’s energy use, believes that XRP is 100,000 times more energy efficient than Bitcoin.

Finally, Garlinghouse expressed his dissatisfaction with Gensler’s reticence on Ethereum’s regulatory status. Particularly considering Ether ETFs are expected to be popular once they are legalised. 

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Bitcoin Price Flash Crashed 87% to $8200 on Binance US

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Several flash crashes occurred in the crypto markets today, with the most considerable one being BTC dropping to $8,200 on Binance.US.

After yesterday’s new all-time high at $67,000, bitcoin corrected today with a steep decline to below $64,000. On some exchanges, though, the crash was significantly more violent as BTC dropped as low as $54,000 on Kraken and to four digits on Binance.US.

  • October 20th was a historic day for the primary cryptocurrency as it finally skyrocketed above its previous all-time high and peaked at $67,000. It happened on the wings of the recently approved Bitcoin Futures ETF in the US.
  • After a brief correction hours later, BTC was closing down on its new record earlier today, when the situation rapidly changed.
  • In a matter of minutes, bitcoin went from $66,700 to $63,600 on most exchanges (including Bitstamp).
  • On others, though, such as Kraken and FTX, the price decline was significantly more severe.
  • In an apparent flash crash event, meaning the price of the asset dumped by a large percentage and spiked back up immediately, BTC went to a low of $58,500 on FTX.
  • On the veteran US trading venue, Kraken, bitcoin dumped all the way down to $54,100 before recovering to its current level of roughly $65,000.
  • However, none had it worse than Binance.US. The American branch of the largest crypto exchange saw BTC nosediving to $8,200 – a massive 87% drop in a matter of seconds.
BTC/USD on Binance US
BTC/USD on Binance US
  • Overall, the entire market retraced in a matter of minutes. Ethereum was closing down on its own ATH at $4,400 before losing more than $200.
  • Somewhat expectedly, the enhanced volatility in a short period of time caused pain for overleveraged traders. Data from Bybt shows that the liquidations have jumped to $500 million on a 24-hour scale.
  • The largest single BTC liquidation order occurred on Bitmex and was worth $10 million.

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VeChain Price Analysis: VET swiftly moves above the previous high, targets $0.135 next?

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  • VeChain price analysis is bullish today.
  • VET/USD saw further advance today.
  • Closest resistance at $0.135.

VeChain price analysis is bullish today as more upside was seen over the past hours after a slight pause overnight for the rally that started yesterday. Therefore, we expect VET/USD to continue higher and reach the $0.135 mark next.

VeChain Price Analysis: VET swiftly moves above the previous high, targets $0.135 next? 1
Cryptocurrency heat map. Source: Coin360

The cryptocurrency market traded in the green over the past 24 hours, with Bitcoin up by 3.36 percent. Ethereum saw an even better result, with a gain of 11.82 percent, while Solana (SOL) is the top performer, with a 21 percent increase.

VeChain price movement in the last 24 hours: VeChain breaks above the previous high at $0.128
VET/USD traded in a range of $0.1164 – $0.1321, indicating strong volatility over the last 24 hours. Trading volume has increased by 94.63 percent and totals $640.6 million, while the total market cap trades around $8.46 billion, ranking the coin in 23rd place overall.

VET/USD 4-hour chart: VEt targets $0.135 next?
On the 4-hour chart, we can see the VeChain price action still pushing higher, likely leading to a test of $0.135 resistance later today.

VeChain Price Analysis: VET spikes above the previous high, targets $0.135 next?
VET/USD 4-hour chart. Source: TradingView
VeChain price action has slowly moved higher over the past weeks as bearish pressure frequently has returned, preventing clear higher highs set. After an initial rally on the 1st of October, VET/USD reached $0.115.

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From there, a week-long consolidation was seen around $0.11 until a quick spike higher to $0.123 was followed by a sharp retracement of more than 15 percent to the $0.103 mark.

Early last week, VeChain price rallied back to the $0.123 high, with further slight higher highs set over the week. Over the weekend, VET/USD retraced and set a higher low, around $0.115.

Consolidation followed until a rapid push higher began yesterday, resulting in a move towards $0.128. After a slight pause overnight, more upside followed today, quickly pushing VET to a new higher high above $0.128.

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VeChain Price Analysis: Conclusion
VeChain price analysis is bullish today as a strong advance over the last 24 hours pushed VET above $0.128 previous high without much hesitation. Therefore, we expect VET/USD to test the $0.135 next resistance later today.

While waiting for Fantom to move further, read our guides on LTC wallets, Gero wallets, and DeFi wallets.

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