Bitcoin price rally unlikely as BTC price ranges below $43,000, SEC Commissioner comments on ETF approval
- Bitcoin price is range bound below $43,000 on Tuesday, despite the fanfare from issuers post the BTC ETF approval.
- SEC Commissioner notes the regulator initially applied different standards to Bitcoin ETP.
- BTC ETF approval roused interest due to long wait, may have played role in hack of the regulator’s X account.
Bitcoin ETF approval likely disappointed BTC holders that anticipated a massive rally in the underlying asset. Securities and Exchange Commission’s (SEC) Hester Peirce notes that the regulator took years to approve a Bitcoin Exchange Traded Product, and that likely resulted in the fanfare surrounding ETF approval, in the community.
Bitcoin price action was restricted below $43,000 on Tuesday as the asset failed to breach resistance at $43,418. BTC is likely to remain range bound unless the asset sees a daily candlestick close above $43,400.
Also read: Bitcoin bears hit pause at $41,700, BTC price likely to begin recovery soon
Daily Digest Market Movers: Bitcoin ETP generates fanfare, SEC Commissioner comments
- US financial regulator, SEC treated Bitcoin Exchange Traded Products (ETPs) differently when compared to others, due to the underlying asset.
- SEC Commissioner, Hester Peirce, told Coin Stories Podcast Host, Natalie Brunell, that the regulator’s different treatment of a BTC ETP likely generated fanfare surrounding the approval of the ETFs.
- The SEC finally approved ETFs when a DC Court forced the regulator’s hand, asking why a Bitcoin ETP was treated differently because of the underlying asset.
- Commissioner Peirce notes that Bitcoin, as it is a new asset, took longer for the agency to approve an ETP since that brings the securities product to a large number of investors.
- Commissioner Peirce noted that Chair Gensler was the deciding vote in Bitcoin ETF approvals and commented on the SEC’s hacked “X” account.
- The regulator believes that the fanfare surrounding the event may have played a role in the hack and noted that the authorities are currently looking into it.
- Bitcoin ETF approvals may have disappointed a large number of market participants as it did not fuel a rally in BTC price, instead, it turned out to be a “sell the news” event.
Technical Analysis: Bitcoin price remains range bound, BTC trades below $43,000
Bitcoin price is $42,868, on Binance, at the time of writing. The asset remained range bound below the $43,000 level on Tuesday. BTC price action has disappointed market participants as the asset remains restricted below key resistance at $43,418, the lower boundary of a bearish imbalance zone, seen in the price chart below.
BTC price faces resistance at the 50% Fibonacci Retracement level at $43,074, of Bitcoin’s decline from November 2021 to November 2022. The second resistance is the lower boundary of the imbalance zone between $43,418 and $45,607. Once the gap is filled, BTC price is likely to resume its downward trajectory.
BTC/USDT 1-day chart
SEC vs Ripple lawsuit FAQs
Is XRP a security?
It depends on the transaction, according to a court ruling released on July 14:
For institutional investors or over-the-counter sales, XRP is a security.
For retail investors who bought the token via programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.
How does the ruling affect Ripple in its legal battle against the SEC?
The United States Securities & Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token.
While the judge ruled that programmatic sales aren’t considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this last case, Ripple did breach the US securities law and will need to keep litigating over the around $729 million it received under written contracts.
What are the implications of the ruling for the overall crypto industry?
The ruling offers a partial win for both Ripple and the SEC, depending on what one looks at.
Ripple gets a big win over the fact that programmatic sales aren’t considered securities, and this could bode well for the broader crypto sector as most of the assets eyed by the SEC’s crackdown are handled by decentralized entities that sold their tokens mostly to retail investors via exchange platforms, experts say.
Still, the ruling doesn’t help much to answer the key question of what makes a digital asset a security, so it isn’t clear yet if this lawsuit will set precedent for other open cases that affect dozens of digital assets. Topics such as which is the right degree of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales are likely to persist.
Is the SEC stance toward crypto assets likely to change after the ruling?
The SEC has stepped up its enforcement actions toward the blockchain and digital assets industry, filing charges against platforms such as Coinbase or Binance for allegedly violating the US Securities law. The SEC claims that the majority of crypto assets are securities and thus subject to strict regulation.
While defendants can use parts of Ripple’s ruling in their favor, the SEC can also find reasons in it to keep its current strategy of regulation by enforcement.
Can the court ruling be overturned?
The court decision is a partial summary judgment. The ruling can be appealed once a final judgment is issued or if the judge allows it before then. The case is in a pretrial phase, in which both Ripple and the SEC still have the chance to settle.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
