Bitcoin is going through a bit of price reversal despite making some notable gains this year. After hitting an all-time high of $69,000 in September 2021, the original cryptocurrency began its natural movement to the downside, but this became fatal after actions of several bad actors in the market – namely Terra/Luna and FTX – led to what was called the catastrophic crypto winter of 2022.
However, 2023 has been much kinder to the Bitcoin and cryptocurrency market, helped by the relaxed macroeconomic situation of cooling inflation levels in the U.S. economy.
Bitcoin Surges Briefly Following Court Decision In Favor Of Grayscale
In the last week of August, Bitcoin briefly crossed the $28,000 mark following news that crypto asset manager Grayscale won a major victory over the SEC in a lawsuit related to the “unfair” dismissal of the company’s attempt to convert its Bitcoin Trust fund (GBTC) into a spot-market traded Bitcoin ETF.
A federal court ordered the SEC to reevaluate its decision to reject Grayscale’s Bitcoin ETF application, which led to the crypto market soaring. The event took place while the SEC was preparing to make a decision on whether to accept the first batch of spot Bitcoin exchange-traded fund (ETF) applications for the U.S. market.
The applicants included Wall Street giants such as BlackRock, WisdomTree, VanEck, Valkyrie, and Bitwise.
However, the securities regulator decided to postpone its decision until October, leading to the Bitcoin and crypto market losing its momentum once more.
Crypto Sector Expects The SEC To Accept First-Ever Bitcoin ETF For U.S. Spot Markets
Back in June, BlackRock, the world’s largest asset manager, announced that it was preparing to apply for a Bitcoin ETF listing on the U.S. stock exchanges, which caused a major frenzy in the crypto market. Bitcoin event breached the $30,000 mark in July on the back of the news.
However, the excitement surrounding the Bitcoin ETF started to wear off by the end of the month, which led to cryptocurrency prices slowing. In August, a lot of investors were frustrated by the market’s stagnation so they started to liquidate their futures position, which caused further decline in crypto prices.
SEC Considers All Crypto Except Bitcoin To Be Securities
Then there is the regulatory aspect.
After the Terra/Luna and FTX debacle, regulators in the U.S. began to crack down on crypto service providers that are involved with facilitating transactions, trading, or creating cryptocurrencies.
The SEC’s stance is that all cryptocurrencies except Bitcoin are securities and should be regulated as such. The agency declared war on major cryptocurrency exchanges like Binance, Coinbase, and Kraken by alleging that the entities were dealing in the unlicensed sale and transfer of securities.
The exchanges denied the allegations while stating that lawmakers should create bespoke laws for crypto assets as they do not fall under existing rules for digital assets and securities.
Interestingly, the SEC does not consider Bitcoin to be security, as the regulator claims it to be a commodity similar to gold and silver, and activities involving the asset should be regulated as such.
Investors Accumulating More Bitcoin In Anticipation Of Post-Halving Surge
Bitcoin is expected to undergo its halving cycle in Q1 2024. Halving is a procedure that occurs every four years on the Bitcoin blockchain when the rewards procured by miners for mining BTC and adding transactions to the block are cut in half.
Usually, the price of Bitcoin surges after the halving, which has been the case during the past cycles. Market experts anticipate Bitcoin to move past its previous all-time highs after the halving event in April of next year.
Both large and small-scale crypto investors are accumulating more Bitcoin with the expectation of the asset gaining historic price levels in 2024.
At the time of writing, Bitcoin (BTC) is trading at $25,873 – up by 0.5% from its previous day’s price.