On the evening of August 31, the price of Bitcoin briefly dipped below $26,000, hitting a low of $25,660 on the Binance exchange.
In the past 24 hours, Bitcoin has seen a 4.6% decrease in value, as reported by CoinGecko. Currently, the cryptocurrency is trading below the $26,000 mark.
This downturn has had a ripple effect, with all the top 10 cryptocurrencies by market capitalization slipping into the “red zone.” Ethereum saw a 3.4% loss, while Solana experienced the most significant decline at 4.3%.
The negative sentiment in the market can be attributed to the actions of the U.S. Securities and Exchange Commission (SEC). On August 31, the SEC decided to postpone its verdict on applications for spot Bitcoin exchange-traded funds (ETFs) from BlackRock, Fidelity, Bitwise, VanEck, WisdomTree, Invesco, and Valkyrie, delaying the decision until at least mid-October.
The SEC has a total of 240 days from the date of the application to make a decision. Previously, Bloomberg analysts James Seyffarth and Eric Balchunas had estimated a 75% probability of a spot Bitcoin ETF being approved by the end of 2023, but potential delays were not ruled out.
BlackRock, on June 15, filed its application with the SEC for an investment product based on digital gold. Subsequently, similar applications were submitted by Valkyrie, Fidelity Investments, WisdomTree, and Invesco, although all initial applications were returned by the regulator.
However, the companies promptly resubmitted refined proposals. On July 14, the SEC accepted applications from BlackRock, VanEck, Invesco, Fidelity Investments, and WisdomTree for review.
As of now, the SEC has not granted approval for any spot Bitcoin ETFs, except for similar products based on futures contracts for Bitcoin from ProShares and Valkyrie Investments.
While former SEC lawyer John Reed Stark has dismissed the possibility of approval for a spot exchange-traded fund based on digital gold, experts at Bernstein and former SEC Chairman Jay Clayton see a high likelihood of approval for a new wave of applicants.
CEOs like Fred Thiel of mining company Marathon Digital remain optimistic, and Tom Lee, co-founder of analytical firm Fundstrat, predicts significant growth for Bitcoin if these applications receive approval.