The cryptocurrency chatrooms and websites were abuzz yesterday with a double whammy of potentially good news: the SEC (the US Securities and Exchange Commission) was considering two separate exchange-traded fund (ETF) applications, one for Ether (Ethereum) and one for Bitcoin.
You can read more about it – and you may want to bookmark these sites, too – as other sites that cover the space were discussing the implications for the crypto community, blockchain developers, and traders as well:
- Zero Hedge on the Ethereum (ETH) price surge
- Coin Telegraph on the possibilities for both ETH and Bitcoin (BTC)
- Coin Desk says the original ETH ETF application was filed in July 2016.
What happened last time?
Funny how the crypto space moves lightning fast. While it may seem like “way back when” that the SEC ruled against the Bitcoin ETF, it was actually only on March 10, 2017. That’s not quite seven weeks ago.
The price of Bitcoin did some crazy things in the weeks leading up to the announcement (“buy the rumor, sell the news,” though the rumor was that there was a chance of it being approved), then saw a precipitous drop once the news was announced.
Reading the trading tea leaves
You don’t have to be a wizard to see that this type of rumor – and the subsequent news – can drive prices north. Here’s a 24-hour chart (from Poloniex) detailing what’s up with ETH:
Bitcoin has moved up, too – though not at a double-digit rate over the past day – and now trades on Poloniex at a shade above $1400. (This, too, can change in an instant.)
These things take time, though: rumors of a BTC ETF were rampant for months before the announcement, and you would expect the SEC to take its time on the ETH ruling. (You can also read the SEC’s document, from January 13, here: SEC notice.)
Really, price speculations in any market are nothing new. For every cry of “bubble,” there’s someone else with a lofty prediction that might seem preposterous.
And the Bitcoin and Ether markets really aren’t any different in that regard to the gold market: Warren Buffett supposedly hates gold, while speculator Doug Casey thinks gold could double this year.
Of course, we’ll be watching this very closely. Our bet, though, is that FOMO will win big once either, or both, ETFs get approved. The flow of legitimate capital into a market that is perceived to be part of the underground is just the beginning.