27 Nov 2023
What if the ETF doesnt get approved
While the approval of a Bitcoin Spot ETF would be a significant step for the cryptocurrency, its existence and long-term prospects are not solely reliant on this single event. The market might need to adjust and realign its narrative if the ETF is not approved.
As we approach the critical juncture, just six weeks away from the initial decision on the much-anticipated Spot Bitcoin ETF, market optimism is at a high. Bloomberg's analysis indicates a 90% chance of approval, this probability has risen by the recent developments with Binance falling under the DOJ's scrutiny.
However, as informed market participants we must remain vigilant and prepared for all outcomes, including the possibility of non-approval. In this article, we delve into implications in the event the ETF does not get the green light. For a comprehensive understanding of what an ETF approval could mean, be sure to read our playbook here.
The potential rejection of a Bitcoin Spot ETF by the SEC could have wide-reaching implications for the crypto market. Despite a prevailing market sentiment favoring approval, the risk of non-approval remains, potentially leading to a sharp short-term decline in Bitcoin's price, with predictions suggesting it could fall below $30,000. Such a rejection would not only dampen market sentiment, viewed as it is as a milestone of institutional acceptance, but could also trigger legal repercussions for the SEC, particularly in light of past legal challenges.
The impact of this decision would likely extend beyond Bitcoin, affecting the wider market, especially with the SEC's possible shift in focus towards spot ether ETF applications. However, looking beyond these immediate effects, Bitcoin's long-term prospects remain robust. Its role as a store-of-value asset and the anticipated halving event are poised to positively influence its price over the long term, underscoring Bitcoin's strength as a decentralized entity independent of an ETF's fate.
Adding to the scenario of a potential non-approval of a Bitcoin Spot ETF by the SEC, if the rejection comes without a valid reason, especially in the current context where Binance is under the DOJ's scrutiny, it could lead to legal actions from major financial entities like BlackRock. These firms, anticipating a more open regulatory environment, might challenge the SEC's decision, especially if it seems arbitrary or lacking in substantive reasoning. This could result in significant legal battles, further entangling the relationship between crypto markets and regulatory bodies, and potentially shaping future regulatory approaches to digital assets.
In conclusion, as we eagerly anticipates the SEC's decision on the Spot Bitcoin ETF, it's crucial to remain prepared for various outcomes. While there's strong optimism backed by Bloomberg's analysis, the possibility of non-approval still looms, potentially impacting Bitcoin's price and the broader crypto market. The situation is further complicated by potential legal challenges from major players like BlackRock if the rejection lacks clear justification, especially in the current regulatory climate marked by Binance's DOJ scrutiny. Regardless of the immediate outcome, Bitcoin's long-term prospects as a decentralized store-of-value asset remain strong, suggesting resilience in the face of regulatory decisions. The cryptocurrency market, while hopeful for a favorable decision, must navigate these possibilities with strategic foresight and adaptability.
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