Elemen Group, a cryptocurrency economist and digital asset solution analyst, published a report explaining that the SEC's delay in approving the Bitcoin ETF proposal was the main reason why the market had become so boring in the past few weeks.
Crypto Market In 'Choppy'
"We can say that the depressed volatility pattern we see with Bitcoin is the market is slowly adopting Bitcoin as the SoV (Store of Value)," wrote Element analysts, Thejas Nalval and Kevin Luon, in a report published last week.
Another inconclusive theory cited by the report is the mechanism for finding BTC prices to be "more efficient."
The Bitcoin volatility index remained at 8.04 percent in early January, however, in the past 60 days, this number has dropped to 2.71 percent. Therefore, Nalval and Luon agree that Bitcoin is running out of momentum towards the fourth quarter.
The report also shows that brokerage companies that allow people to place bets on prices illegally have a negative impact on the market.
Role of Rejection of Bitcoin ETF
The price of Bitcoin also depends on SEC approval or the refusal of the Bitcoin ETF proposal. This year, ten ETFs were rejected by the SEC - Winklevoss BTC ETF in July and the rest of the nine ETFs in August.
The only proposal that remains unanswered is the Bitcoin VanEck / SolidX ETF. When the SEC postponed the decision in September, it caused disruption in the Bitcoin market. However, prices are stable after investors know that the decision can be positive in the future. The report notes that pending decisions have resulted in a boring market
Interestingly, the SEC can extend the deadline for approving ETF proposals submitted on the federal list with a maximum of 240 days. This can happen if the agency decides to use all extensions in the approval process.
On August 8, the SEC postponed the decision by extending a period of 45 days. At that time, the agency wrote that the final decision would arrive on September 30. Because the decision was extended on September 20, analysts expect the SEC to utilize all extensions. If this happens, the final decision will arrive at the end of February.
The VanEck / SolidX BTC ETF has garnered support from many investors, but, the report concludes that Bitcoin users must be prepared for both decisions because if the proposal is rejected, "it could be one or two more years before another ETF for approval again given the market conditions underlying current and SEC thinking. "