On March 10, the tides of the cryptocurrency world turned when the US Securities and Exchange Commission (SEC) officially gave the snub to the Winklevoss twins’ Bitcoin ETF, affectionately dubbed COIN. While most analysts predicted a doom-and-gloom scenario, Bitcoin had other plans, rallying back almost immediately and settling comfortably around $1,225.
Bitcoin’s Bouncing Act
Prior to today, Bitcoin’s price held steady at $1,225. After the SEC’s news sent it spiraling almost to the $960 mark, Bitcoin quickly recovered, proving it can perform a financial gymnastics routine. Yes, within minutes it sprang back to $1,150 and then climbed its way back into the $1,225 range over just a few days.
The Price Peak
Fast forward to today, and Bitcoin hit a peak of $1,257 across major exchanges like Bitstamp, Kraken, and Bitfinex. This achievement moves it closer to the 2017 year-to-date high of $1,290 achieved just before the SEC’s disapproval. Investors must feel like they’ve been on a roller coaster that somehow keeps climbing, even when it should have dropped!
Investor Sentiment before the SEC’s Decision
The lead-up to the SEC’s ruling was an intriguing spectacle, with an increasing number of investors expressing confidence in its approval. Analysts from renowned financial institutions, such as Bloomberg, stoked the flames of optimism, suggesting the COIN ETF would likely receive the green light. In fact, on March 5, Sr. ETF Analyst Eric Balchunas quipped:
“The odds for and against are so evenly matched. You’ve got possible regulation, liquidity and security issues, but ETFs have this long history of opening up new markets.”
Why Bitcoin Stood Its Ground
In hindsight, whether the ETF was approved or denied, Bitcoin’s price trajectory would have likely followed a similar pattern. Approval could’ve ignited a short-term spike, but the mid-term forecast remained a stabilizing low $1,300 range. Why? Because the Bitcoin community and industry have come to realize that a Bitcoin ETF might not be necessary. Bitcoin entered the scene in 2009 as an alternative to the conventional financial system. Now, trying to shove it into a regulatory box just feels wrong.
ETFs: A Double-Edged Sword?
The argument for the ETF approval hinged on high-profile investors needing a secure route to invest sizable amounts of Bitcoin. Traditional hedge funds and investment firms find themselves too risk-averse to dip into exchanges that may not meet their liquidity needs. Yet, for many in the Bitcoin realm, the vision of a wildly unregulated digital currency seems more appealing than creating a cozy SEC-approved investment vehicle for hedge funds.
Community Expectations and SEC Caution
Ironically, the community had low expectations for the SEC granting the COIN ETF approval. In their eyes, the SEC’s primary bailiwick is to protect investors from risks associated with an asset lacking traditional structure—like, say, Bitcoin. While potential events (think hard forks or major network changes) remain in the realm of speculation, the SEC is understandably hesitant to dive into what many consider a “risky” asset.
Stability Amidst the Noise
Since the SEC revealed its verdict, the market has shown surprising resilience, mirroring its composure during other turbulent announcements, like those from the People’s Bank of China in early 2023. As time goes on, Bitcoin’s stabilizing trajectory hints at growth not only as a currency but as a robust technology and financial ecosystem.
