BitcoinBTC, ethereum and Ripple’s XRPXRP have crashed back to $1 trillion, wiping away $200 billion of value in a matter of days as fears swirl over a shock Federal Reserve “rug pull.”
The bitcoin price dived this week, crashing more than 10% and dragging down ethereum, XRP and other major cryptocurrencies BNBBNB, cardano, dogecoin, litecoin, solana, tron and shiba inu, despite crypto exchange Coinbase passing a “critical milestone.”
Ahead of the sharp crypto price crash, a former U.S. Securities and Exchange Commission (SEC) official warned BlackRock’sBLK landmark spot bitcoin exchange-traded fund (ETF) bid is doomed to fail—casting doubt over the recent bitcoin price rally.
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“My take is that the current SEC will not approve a bitcoin spot ETF application for a range of compelling reasons,” Stark, the SEC’s former office of internet enforcement chief, posted to X (Twitter).
Stark pointed to analysis by experts at Better Markets that found “spot bitcoin markets have a history of artificially inflated trading volumes due to rampant manipulation and wash trading; are highly concentrated; and rely on a select group of individuals and entities to maintain bitcoin’s network,” to explain why he expects the SEC to block a spot bitcoin ETF.
Hype surrounding BlackRock’s spot bitcoin ETF bid revitalized the bitcoin, ethereum, XRP and crypto market in June, triggering a flood of rival applications as asset managers rushed to challenge the world’s largest asset manager as the first to market.
However, the SEC last week delayed a decision on approving or denying the spot bitcoin ETF proposed by Cathie Wood’s ARK Investment Management, setting up what will be a closely-watched flurry of decisions in early September with applications from Bitwise, BlackRock, Fidelity, InvescoIVZ, WisdomTree, VanEck and Valkyrie all on the docket.
Stark also predicted “the crypto-regulatory tides could shift exponentially” following next year’s U.S. presidential election.
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“Given the partisan divide that has evolved regarding crypto, especially at the SEC, my take is that should a Republican get elected U.S. President in 2024, the slate of Republicans appointed to the SEC will likely: 1) Decrease significantly the SEC’s crypto-enforcement efforts, probably filing mostly fraud cases, shifting efforts away from charging pure registration violations (such as the failure of a crypto-trading platform to register as an exchange, broker-dealer and clearing firm); and 2) Become far more receptive to approving a bitcoin spot ETF and far more likely to take other significant crypto-friendly regulatory actions,” Stark wrote in his X post.
This week’s bitcoin price and wider crypto crash has failed to dampen expectations from bullish bitcoin, etheruem and XRP watchers.
“This may be one of the final shakeouts before the beginning of a new wave of a bullish cycle,” Nathan Leung, a cofounder of crypto education YouTube channel Cryptonauts, said in emailed comments, pointing to reports that the number of long-term bitcoin holders has reached an all-time high.
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