Countdown to Launch of Bitcoin Cash ETFs; When will the first application be approved?

More than ever, the cryptocurrency community is waiting for the US Securities and Exchange Commission to approve the application to launch the first Bitcoin Cash ETF in America. This decision, which can be called the biggest legislative event in the cryptocurrency space, may be implemented in less than 20 days; But how will prices react to this?

A new report from Fox Business shows that staff from the US Securities and Exchange Commission recently held conference calls with groups applying to launch Bitcoin Cash ETFs. It is said that in these calls, details regarding the application process and the structure approved by the Stock Exchange Commission for launching a cash ETF have been discussed.

Staff at the US Securities and Exchange Commission have said the government agency will only review applications that only authorize the purchase of the financial product in exchange for cash, not Bitcoin. In addition, the redemption of fund shares should only be done with cash. It should be noted that there is no such restriction regarding the majority of American stock exchange funds, and the issuers can provide the terms of purchase or redemption both with cash and non-cash. The reason for this limitation is the stock exchange commission's concern about the violation in the process of buying or redeeming using digital currencies, as well as not allowing the direct purchase of bitcoins in cash markets for brokerages.

Some experts predict approval of the first request to launch a Bitcoin Cash ETF before the end of 2023. However, keep in mind that the US Securities and Exchange Commission is a government agency and many of its employees will not be at work for the Christmas holiday. Besides, according to the findings of Fox Business, this organization has asked the companies to send the amendment of their requests by December 29 (8).

David Weisberger, CEO of CoinRoutes says:

As can be seen from the status of all applications to launch Bitcoin Cash ETFs, the US Securities and Exchange Commission has switched to a cash-based model, which appears to be the agency's final hurdle before approving applications. While there is no certainty as to when the applications will be approved, it appears likely to happen before the commission's next deadline on January 10.

The June 10 date, which Weisberger and other financial market experts have pointed out, is the deadline for the Exchange Commission to review the request to launch a bitcoin cash ETF from Ark 21Shares, owned by Bitcoin proponent Cathie Wood.

Experts' prediction of price reaction to the approval of ETFs

Analysts at trading firm QCP Capital recently said in a note that the launch of the first Bitcoin cash ETF in January could lead to a decrease in demand for the digital currency and a “buy on rumour, sell on news” scenario. The experts of this institution say that the possibility of correcting the market up to the level $36,000, there is an uptrend before the resumption. According to QCP Capital analysts, the resistance facing Bitcoin in the upward direction is the same area $45,000 to $48,000 Is.

Analysts at JP Morgan, the largest bank in the United States, also addressed the issue of price reaction in a note about a month ago, confirming requests to launch Bitcoin cash ETFs. They are also not optimistic about the upward and stable impact of this expected event on the market.

Nikolaos Panigirtzoglou, one of J.P. Morgan's analysts said in this regard:

Aside from entirely new capital flowing into cash ETFs that may be approved in the future, a more likely scenario is that (instead of new capital) capital in existing financial products that are somehow tied to Bitcoin, such as the BitFund GrayXil's coin, futures ETFs and shares of companies active in the field of Bitcoin mining, enter the newly approved ETFs.

He also noted that cash ETFs already exist in Canada and Europe, but investors have shown little interest in these financial products.