Bitcoin rose $800 in less than 2 minutes this Friday afternoon (17) after Bloomberg analysts noted that the SEC is in talks with exchanges over spot Bitcoin ETF applications in the US. However, experts stated that this was already expected, and did not change their predictions.
Via Twitter, Eric Balchunas was the first to comment on recent events. Balchunas, a senior ETF analyst at Bloomberg, has become one of the top references for Bitcoin investors.
“Listening to conversations [divisão de] SEC Trading & Markets engaged in exchanges this week on the spot Bitcoin ETF (19b-4s). It warns them that it wants ETFs to do ‘cash creation’ (rather than ‘in-kind’) and has asked them for changes in the coming weeks.”said Balchunas. “This is not unexpected, but it is a good sign.”
In short, the term “cash creation” can be translated to “money creation,” that is, investors create new units in the ETF by depositing money. “In-kind” would be creating new units with Bitcoin itself.
“’Cash create’ makes sense in my opinion because brokers cannot trade Bitcoin, so choosing ‘cash create’ puts the onus on issuers to trade Bitcoin and prevents brokers from having to use unregistered subsidiaries or third-party companies to to trade with. BTC. There are generally fewer restrictions for them.”
Cash makes sense IMO because broker-dealers cannot trade bitcoin, so doing cash puts the onus on issuers to trade bitcoin and saves broker-dealers from having to use unregistered subsidiaries or third-party companies to deal with to trade the btc. Less restrictions on them in general
— Eric Balchunas (@EricBalchunas) November 17, 2023
In conclusion, Balchunas states that only two or three managers planned to use ‘cash creation’ and that all others opted for ‘in kind’. “They will have to adapt, otherwise they risk delays”the analyst said, noting that he still stands by his 90% forecast on the approval of these ETFs, but that this “It is a good sign that the process is progressing”.
Bitcoin Surges $800 After Bloomberg Analysts Tweet
Although Bitcoin didn’t follow the rise of the gold and US stock indexes this week, the market’s largest cryptocurrency soared after Eric Balchunas’ tweet. In less than two minutes, BTC went from $36,000 to $36,800, showing the market’s concerns about the adoption of these ETFs.
Another Bloomberg analyst who commented on the issue was James Seyffart. Seyffart, as influential as Balchunas, said the update didn’t change anything but showed the SEC is making progress and working on the orders.
“Eric’s tweet [Balchunas] explains what we think this means. Again, this doesn’t change our predictions at all, it just tells us that some things are still happening behind the scenes.
Regarding the SEC’s request, the analyst stated that “cash creating” ETFs will not change anything for end investors. “It doesn’t really matter because they will still be backed by physical bitcoin”Seyffart added, noting that in-kind creation will not be allowed now, but this could change in the future.
As for Bitcoin’s rise following his tweets, Seyffart seemed surprised and responded with a “hand on face” emoji. In other words, because he believes nothing has changed in his predictions, the analyst does not believe the news should have any impact on the market.
“This Tweet Made Bitcoin Rise $800 I Think”one follower responded.
🤦♂️
—James Seyffart (@JSeyff) November 17, 2023
Finally, the SEC will have to respond to several ETF requests in January 2024. As time grows shorter, investors are increasingly eager to know the Commission’s response and, above all, to understand the real impact these ETFs will have on the market.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
