Bitcoin Price Recovery Is Unlikely as BTC Price Is Below $43,000, SEC Commissioner Comments on ETF Approval

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• Bitcoin price is trading in a range below $43,000 on Tuesday despite fanfare from issuers following BTC ETF approval.
• The SEC commissioner notes that the regulator initially applied different standards for Bitcoin ETP.
• The BTC ETF approval sparked interest due to the long wait and may have played a role in the regulator’s X account hack.

The approval of the Bitcoin ETF is likely to have disappointed BTC holders who were expecting a massive rally in the underlying asset. Hester Peirce of the Securities and Exchange Commission (SEC) points out that it took the regulator years to approve a Bitcoin exchange-traded product and that this likely caused a stir in the community around the ETF approval.

Bitcoin’s price action was restricted below $43,000 on Tuesday as the asset failed to break through the resistance at $43,418. BTC is likely to stay within the range unless the asset records a daily candlestick close above $43,400.

Also read: Bitcoin bears took a break at $41,700, BTC price is expected to recover soon

Daily Digest Market Movers: Bitcoin ETP is causing a big stir, comments SEC Commissioner

• The US Financial Regulatory Commission (SEC) treated Bitcoin Exchange Traded Products (ETPs) differently than others due to the underlying asset.
• SEC Commissioner Hester Peirce told Coin Stories podcast host Natalie Brunell that the regulator's different treatment of a BTC ETP likely caused a stir surrounding the ETFs' approval.
• The SEC finally approved ETFs when a court in Washington DC forced the regulator to act, asking why a Bitcoin ETP would be treated differently based on the underlying asset.
• Commissioner Peirce notes that since Bitcoin is a new asset, it has taken longer for the authority to approve an ETP as it makes the securities product available to a large number of investors.
• Noting that Chairman Gensler was the deciding vote in approving Bitcoin ETFs, Commissioner Peirce commented on the hacked SEC “X” account.
• The regulator believes the fanfare surrounding the incident may have played a role in the hack, noting that authorities are currently investigating the matter.
• The approval of Bitcoin ETFs may have disappointed a large number of market participants as it did not trigger an upswing in BTC price, but rather it was a “sell the news” event.

Technical analysis: Bitcoin price remains in a certain range, BTC is trading below $43,000

At the time of writing, Bitcoin price on Binance is $42,868. The asset remained in a range below the $43,000 mark on Tuesday. BTC price action has disappointed market participants as the asset remains below key resistance at $43,418, the lower boundary of a bearish disequilibrium zone, as seen in the price chart below.

BTC price faces resistance at the 50% Fibonacci retracement level at $43,074, Bitcoin's decline from November 2021 to November 2022. The second resistance is the lower boundary of the disequilibrium zone between $43,418 and $45,607. Once the gap is closed, BTC price is likely to continue its downward trend.

BTC/USDT 1-day chart

Frequently asked questions about the SEC vs. Ripple lawsuit

According to a court ruling published on July 14, the transaction comes down to:

For institutional investors or over-the-counter sales, XRP is a security.
For retail investors who purchased the token through programmatic sales on exchanges, on-demand liquidity services and other platforms, XRP is not a security.

The US Securities and Exchange Commission (SEC) accused Ripple and its executives of raising more than $1.3 billion through an unregistered asset offering of the XRP token.

While the judge ruled that programmatic sales do not qualify as securities, sales of XRP tokens to institutional investors are actually investment contracts. In this latest case, Ripple violated US securities laws and must continue to dispute the approximately $729 million it received under written contracts.

The ruling offers a partial win for both Ripple and the SEC, depending on how you look at it.

Ripple has a big advantage in the fact that programmatic sales are not considered securities, and this could bode well for the broader crypto sector since most of the assets targeted by the SEC's crackdown are managed by decentralized entities that have sold their tokens mainly to private investors via exchange platforms, experts say.

Still, the ruling doesn't help much in answering the key question of what makes a digital asset a security. Therefore, it is not yet clear whether this lawsuit will set a precedent for other open cases involving dozens of digital assets. Issues such as what is the right level of decentralization to avoid the “security” label or where to draw the line between institutional and programmatic sales are likely to remain.

The SEC has stepped up its enforcement actions against the blockchain and digital assets industry, bringing charges against platforms such as Coinbase and Binance for allegedly violating US securities laws. The SEC claims that most crypto assets are securities and therefore subject to strict regulation.

While defendants may use parts of Ripple's ruling to their advantage, the SEC may also find reasons in it to maintain its current regulation-through-enforcement strategy.

The court decision is a partial summary judgment. The judgment can be appealed once a final judgment has been issued or if the judge allows it beforehand. The case is in the pre-trial phase, where both Ripple and the SEC still have the opportunity to reach an agreement.

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