BTC holds above $47.5K while Grayscale on the outs with SEC over Bitcoin spot ETF

Key Takeaways:

  • Bitcoin (BTC) held above $47,700 on Mar. 29, despite sell-off risks
  • Analytical platform Ecoinometrics says it might be the right time for retail investors to jump in
  • Grayscale Investments emphasized the importance of a spot ETF, and considered a lawsuit in case the SEC denies the application.
Grayscale SEC Bitcoin BTC
image from medium.com

YEREVAN (CoinChapter.com) – Bitcoin (BTC) traded near $47,700 in the Asian-Pacific session Tuesday, after a 27% price advance since Mar. 14. Despite the sell-off risks, traders continued to push BTC up, as the digital asset reached its year-to-date high of over $48,200 on Mar. 28.

Bitcoin (BTC) daily price chart. Source: TradingView.com
Bitcoin (BTC) daily price chart. Source: TradingView.com

As CoinChapter previously covered, the macroeconomic deck was stacked against the alpha crypto, considering the rising inflation, Fed’s tapering policy, and the ongoing war in Ukraine. However, crypto-analytical platform Ecoinometrics’ latest report concluded that the current price could be a profitable market entry for retail traders who don’t own many sats.

If you don’t have a very large position,[…] entering right when momentum is building is ideal to generate returns with low risk. […] Historically trading momentum has been a no-brainer. Losses are typically small while catching the upside can be massive. So even if the days of 20x return in one move are probably gone for Bitcoin it is worth taking a shot.

read the report.

Also read: Bitcoin hits $47.5K, but its correlation with U.S. equities spells extreme sell-off risks.

Additionally, the platform presented Bitcoin’s Mayer Multiple (MM) chart to prove its point. In detail, the latter is an on-chain indicator of economic bubbles. Traders utilize the indicator to determine the best entry points into the market and the potential exit points. In other words, the MM is a gauge of when to buy and when to sell.

Mayer Multiple indicator for Bitcoin (BTC). Source: Ecoinometrics.com
Mayer Multiple indicator for Bitcoin (BTC). Source: Ecoinometrics.com

The chart above illustrates that the BTC/USD exchange rate tends to increase when the MM is between 0 and 1.

Meanwhile, the largest Bitcoin trust, Grayscale Investments, continues the fight with the U.S. Securities and Exchange Commission (SEC).

Grayscale considers suing the SEC.

In hindsight, Grayscale filed an application for the first physically-backed Bitcoin exchange-traded fund (ETF). In other words, the company campaigned to convert its almost $30 billion Bitcoin trust into an ETF, which requires a legal green light from the SEC.

The law enforcement agency’s final deadline to rule on the matter is July 6. However, Grayscale CEO Michael Sonnenshein commented that a lawsuit might be the next step should the SEC decline the application for the first-ever Bitcoin spot ETF.

Also read: Proshares BITO ETF’s Bitcoin exposure reaches new ATH.

Meanwhile, according to Grayscale, investors back the company’s stance. The SEC got roughly 2,700 letters as part of a standard 240-day review period. Moreover, the CEO commented that Grayscale deserves the agency’s endorsement.

GBTC today has been traded since 2015 and it’s been an SEC-reporting company since January of 2020, so every single day that it is trading and being bought and sold by investors and is not being folded into the familiarity and the protections of an ETF wrapper, we really don’t feel that the SEC is doing everything they can to actually protect investors.

said Sonnenshein.

Why is it important for Bitcoin?

In detail, the SEC has previously approved Bitcoin ETFs based on futures trading, as opposed to spot trading. However, futures tend to trade at a premium to the underlying asset, though they can also trade at a discount. David LaValle, Grayscale global head of ETFs, commented on the importance of the spot ETF idea.

Also read: SEC gives a nay to Fidelity spot Bitcoin ETF amid ongoing BTC market decline.

[N]o one’s really talking about the ETF in terms of its viability to hold the asset. It’s really talking about the bitcoin as being held by the ETF. And that’s really something that’s exciting. The ETF wrapper is actually a vote of confidence for the underlying asset.

asserted LaValle.

As of March 2022, the SEC’s decision on the matter remains pending.

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BTC, BTC holds above $47.5K while Grayscale on the outs with SEC over Bitcoin spot ETF

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