The US SEC just opened the comment period earlier than anticipated for the Franklin Templeton spot Bitcoin ETF filed in September. The news is once again sparking hype for Bitcoin, but pundits warn of a potential “sell the news” event on longs when January 2024 hits.
Comment Period Commences for Franklin Templeton Spot Bitcoin ETF
The US Securities and Exchange Commission’s (SEC) initiation for the pending Franklin Templeton spot Bitcoin exchange traded funds (ETF) came in prior to the expected schedule.
“The commission seeks and encourages interested persons to provide comments on the proposed rule change,” the regulator announced on Tuesday.
The Franklin spot Bitcoin ETF’s second deadline comes on January 1, 2024, coinciding with the Hashdex spot Bitcoin ETF. Being late to the party, the ultimatum for SEC to decide whether it approves or denies the application is set for its final deadline on May 30, 2024.
Industry experts like Van Buren Capital and Bloomberg’s James Seyffart see this as a move by SEC as a way to give it a window ahead of its deadline on January 10, 2024, thereby, fast-tracking the process. They are clearly pointing out the decision time for ARK 21 Shares Bitcoin ETF of ARK Invest, which analysts predict may be the date when the commission will simultaneously give a go or a no to all similar filings.
There is, however, a pessimistic outlook for the January 10 event. That is the likely rejection of all spot Bitcoin ETF requests.
The “Sell the News” Event
To play it safe, there’s a possibility that traditional finance (TradFi) who went long on Bitcoin (BTC) may cash out before SEC’s decision time on spot Bitcoin ETFs. That’s if the opinion of former head of derivatives at capital markets firm Genesis Trading, Joshua Lim, is to be relied on.
It’s becoming undeniable that the entry of more TradFi institutions in the game reinforces the bullish narrative for Bitcoin. But then again, the enthusiasm will probably get quashed before the awaited affair occurs due to the massive sell-offs in investors’ positions — a classic example of the “buy the rumor, sell the news” technique.
Lim used the trend prior to the approval of the first Bitcoin futures ETF (BITO) and Coinbase (COIN) in 2021 as an illustration. Both listings peaked at the Chicago Mercantile Exchange (CME) as investors rallied, but they quickly dipped when people started taking profits nearing the end of the countdown.
Bitcoin Now
As of this writing at 4:00 AM UTC time, Bitcoin pumped over 2% to $37.9K in the daily chart in light of the spot ETF developments. The crypto likewise displayed over 21% trading volume over the timeframe as its price moved between a $36.89% low and a $38.36K high.