Bitcoin Price Stagnates at $30K as ETF Applicants Resubmit Applications in Asian Market

Updated: 03 July 2023

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The price of Bitcoin has remained stagnant at around $30,000 amidst resubmitted applications for Bitcoin exchange-traded funds (ETFs) in the Asian market. Bitcoin opened the trading week in Asia at $30,654, according to CoinDesk data, while ETH was at $1,954.

First Mover Asia: Bitcoin Maintains $30K as Prospective Issuers Refile ETF Applications https://t.co/Y2ofMS9sGM

— Evolve Myself (@Evolve_Myself) July 3, 2023

The crypto market faced difficulties last week when the U.S. Securities and Exchange Commission (SEC) deemed current bitcoin ETF filings “inadequate,” resulting in price drops. Some issuers have re-filed, mentioning Coinbase as their market surveillance partner.

According to BitBull Capital CEO Joe DiPasquale, Bitcoin could test a support zone ranging from $27K to $29K. He suggests that such price movement will likely result in deeper declines in altcoins.

“Last week, we highlighted the positive impact on the market if Bitcoin stays above $30K. This week, we observed a shift in sentiment towards altcoins, with ETH showing signs of testing $2K and other altcoins experiencing rallies. Market participants should exercise caution regarding sustained upside momentum.” DiPasquale stated

Spot Bitcoin ETF Approval

The approval of the first Bitcoin ETF may not automatically trigger a bullish trend, despite the potential benefits it offers in terms of accessibility for individual investors and mutual funds. The focus is on seeking approval for a spot-based Bitcoin ETF, which involves the direct purchase of BTC instead of relying on futures-based ETFs.

However, the United States Securities and Exchange Commission (SEC) has consistently rejected all Bitcoin ETF applications, including the recent denial of the VanEck Bitcoin Trust on March 10, 2023.

Potential Solution for GBTC’s Discount Issue

The SEC’s reasoning for rejection has often been the lack of a “comprehensive surveillance-sharing agreement with a regulated market of significant size related to spot Bitcoin.” Regulators are cautious about introducing a Bitcoin product that is both fair and transparent.

Some investors are now considering whether introducing spot Bitcoin ETFs by companies like ARK Invest and BlackRock could address the issues faced by Grayscale’s Bitcoin Trust (GBTC). GBTC is an investment vehicle with shares traded on the stock exchange, but it has experienced a persistent “discount” compared to the actual value of the underlying Bitcoin it holds.

Interestingly, after BlackRock announced its ETF filing, the GBTC “premium” (the difference between its share price and the value of its underlying Bitcoin) experienced an increase, reaching its highest levels in months.

https://twitter.com/spock7862813/status/1673098883600355328?s=20

A Bitcoin spot price ETF filed by BlackRock, the world’s largest asset manager, could potentially lead to significant sell-pressure as Grayscale’s GBTC Trust converts to a Bitcoin ETF. T This conversion may result in a considerable amount of BTC entering the market as investors can finally exit their positions at par. The question remains: How much of the $18 billion will flow into other Bitcoin-related instruments or be sold on exchanges?