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On January 3rd, Wednesday, the U.S. Securities and Exchange Commission (SEC) convened a meeting with leading exchanges to deliberate on their spot Bitcoin ETF applications. Insider information suggests that the SEC might commence notifying issuers of approval as early as this Friday, January 5.
Spot Bitcoin ETF Coming Before January 10?
As the deadline of January 10 approaches, analysts and issuers in the Exchange-Traded Fund (ETF) space express confidence in a positive decision from the U.S. Securities and Exchange Commission (SEC). Stakeholders remain optimistic as the SEC engages in discussions with key participants regarding the approval of Bitcoin ETFs. Speaking to Fox Business, the SEC spokesperson said:
“Broadly speaking, if the Commission declares a registration statement effective, that is reflected on EDGAR. Any Commission 19b-4 orders will be posted on our website and then published in the Federal Register.”
Recent meetings at the U.S. Securities and Exchange Commission (SEC) have generated optimism among major money managers and cryptocurrency firms awaiting approval for a dozen Bitcoin ETF applications. In particular, the SEC is actively engaging with exchanges, urging them to revise and finalize their 19b-4 filings.
However, the SEC retains the authority to reject the applications, introducing an element of uncertainty. A recent research note from Singapore-based crypto platform Matrixport suggests an expectation of rejection for all spot Bitcoin ETF applications. The note cites factors such as the Democratic majority within the SEC’s five-member commission and Chairman Gary Gensler’s cautious stance towards embracing cryptocurrencies as contributing to this anticipation.
As a result of the Matrixport report, the Bitcoin price tanked all the way to $40,000 on Wednesday. However, it has partially recovered in the past few hours and is currently trading at $43,0078 with a market cap of $843 billion.
BTC Price Action
The Bitcoin price has been flirting around $43,000 for a while and facing rejections past its critical resistance of $44,000.
Greeks.live reported a significant decline in ATM (At-The-Money) option implied volatility (IV), dropping to 52% for the week and falling below 65% for the January 12 expiration. Overall, the IV has retreated to levels comparable to the end of the previous year.
The likelihood of the ETF's passage became less and less likely, and the market saw a stalemate. Weakness in crypto mining stocks, and the sell-off in several crypto-related U.S. stocks, also reinforced the market's skepticism.
ATM option IV plummeted to 52% for the week and… pic.twitter.com/orjr1Wcwwf— Greeks.live (@GreeksLive) January 3, 2024
As a consequence, current month put options are now more affordably priced, prompting increased activity in block trades featuring active put buying. Analysis of options market data indicates a lack of bullish sentiment among institutional investors towards the ETF market. These developments collectively paint a cautious picture as the market awaits further clarity on the fate of the Bitcoin ETF.
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