The United States Securities and Exchange Commission (SEC) has extended the timeframe for its decision on whether or not to approve a spot Ether exchange-traded fund (ETF) proposal from asset manager Grayscale.
The delay has been met with disappointment by many in the cryptocurrency community. They had hoped that the approval of the rule change would lead to increased institutional investment in Ethereum (ETH), the second-largest cryptocurrency by market capitalization.
Bitcoin has dropped by more than 7% since the SEC’s announcement . This is due to a combination of factors, including the delay in the Grayscale Ethereum Trust’s approval and concerns about the broader economic outlook. The largest cryptocurrency dropped to around $40,000 on December 11, its lowest level in a week. Not long after, its price recovered and stood at $42,261.
It is important to note that the SEC’s decision is not a final ruling. The agency is still accepting public comments on the proposed rule change. It is possible that the agency will ultimately approve the rule change. It is also possible that it will reject it or delay it further.
The SEC’s decision has also raised concerns about the future of cryptocurrency regulation in the United States. Some fear the agency may be taking a more restrictive approach to cryptocurrencies. This, in turn, could potentially stifle innovation and growth in the industry.
Bitcoin’s return to test support caught investors off guard, leading to the liquidation of nearly $100 million in long positions. This abrupt move served as a wake-up call at the beginning of a week that holds various potential triggers for volatility.
Bitcoin’s volatility made a swift return after a relatively calm weekend. Contrary to the recent “up only” trading trend, BTC/USD experienced a significant 7% drop. Within hours, it reached a low at $40,660 on Bitstamp . This unexpected downturn resulted in a 5% decline in just a few minutes, adversely affecting leveraged long traders.
Data from CoinGlass indicated the long liquidation amount reached $86 million on December 11, with cross-crypto long liquidations exceeding $300 million for the day.
Michaël van de Poppe, founder and CEO of trading firm MN Trading, urged investors , especially those involved in altcoin trading, to remain calm.
The upcoming week features crucial United States macroeconomic data preceding the Federal Reserve’s decision on interest rate policy , adding to potential volatility across various assets, including cryptocurrencies.
Following its recent downward mining difficulty adjustment, Bitcoin seems to be cooling off after a period of almost uninterrupted growth. Traders and analysts are anticipating unexpected developments in BTC price action, introducing market uncertainty with just three weeks remaining in the year.