In a week full of important events, the bitcoin and cryptocurrency sector is preparing for possible changes in the market. From legal proceedings to macroeconomic data releases, the coming days promise a mix of determinants that could substantially affect bitcoin and the broader crypto market.
1. bitcoin Spot ETF Approval? SEC Grayscale Appeal Deadline Approaching (Friday)
On August 29, 2023, the DC Circuit Court of Appeals unanimously ruled in favor of Grayscale regarding its proposal to make bitcoin Trust (GBTC) the first publicly traded bitcoin fund. The court deemed the SEC’s denial “arbitrary and capricious” due to inconsistency with futures-based btc products.
Friday, October 13 is the SEC’s last day to appeal this decision. And not appealing could indicate that the SEC will soon approve multiple bitcoin spot ETF applications.
CNBC reported positive sentiments, with Bitwise CIO Matt Hougan anticipating a spot bitcoin ETF within the year and VanEck CEO Jan van Eck projecting a spot product in early 2024.
Hougan stated: “I hope we see a spot bitcoin ETF this calendar year.” VanEck CEO Jan van Eck predicted: “It looks like early 2024 we will probably see a spot product.”
In particular, the SEC has shown a promising sign, a departure from its historical stance on spot ETF approvals. Eric Balchunas, a top ETF analyst at Bloomberg, highlighted this change in a recent tweet.
Balchunas commented:
Yes, while the SEC delayed bitcoin spot filings last week, it also sent comments to issuers to address their S-1 filings (plumbing-related, legal). This is a break from the typical pattern of delay, delay, radio silence, then denial. A welcome sign in my opinion, although the timeline is unclear.
2. Binance vs. SEC clash continues (Thursday)
The standoff between Binance.US and the SEC took an interesting turn in mid-September when federal judge Zia Faruqui rejected the SEC’s bid to inspect Binance.US’ technology systems, stating that the request was too invasive. The SEC accuses both Binance platforms of operating without proper licenses, allegedly earning a staggering $11.6 billion from US customers since July 2017.
With the SEC’s previous attempt to expedite discovery hampered by Binance.US’ alleged lack of cooperation, October 12 (Thursday) sees the next crucial hearing in this legal battle.
3. US CPI data release (Thursday)
Market watchers are awaiting the September CPI report with bated breath given the current uncertainty surrounding the direction of the economy. Last month’s figures indicated a year-on-year inflation rate of 3.7%. Although the September figures are expected to reflect a slight month-on-month inflation of 0.3%, the annual figure could rise to 3.8%.
However, the core CPI, which omits volatile food and energy prices, could offer more clarity. With a 12-month downward trend, the figure is expected to fall to 4.1% year-on-year in September, which could reinforce the notion of waning inflation.
4. Will the FOMC minutes shed light on monetary policy? (Wednesday)
The release of the September FOMC minutes (2:00 pm ET) is eagerly awaited for information on the Fed’s stance on soft landing scenarios and monetary policy. As bitcoin and broader crypto markets anticipate potential moves, recent increases in yields have caught the attention of several Federal Reserve officials.
The 16 years of last week. bitcoin–crypto-bond-market-recalls-2008-crash/” target=”_blank” rel=”noopener nofollow”>top of a 4.88% 10-year yield has had major ramifications on the US dollar. If the minutes reveal heightened concerns about inflation due to fears of an economic slowdown, yields could soar further. Therefore, macroeconomic headwinds for bitcoin and cryptocurrencies could intensify. Federal Reserve officials’ perspective on the situation will be interesting for traders.
5. More macro data
Another notable data point will be September US Producer Price Index (PPI) inflation, which will be released on Wednesday. In August, the PPI inflation rate surprised many when it exceeded forecasts and reached 1.6% year-on-year (yoy). Next month’s figures are also expected, according to analyst projections, to reach 1.6% year-on-year. Looking at the data in month-on-month terms (MoM), the forecast for September stands at an increase of +0.3%, compared to the previous figure of +0.7%.
Along with the PPI data, OPEC’s monthly report will be published on Thursday. Following the Hamas attack on Israel, the price of oil jumped to $89 a barrel. As such, the price of oil could be one of the big factors hurting the decline in inflation.
Also on Thursday, unemployment claims data in the United States will be made public. Additionally, there will be twelve events with speakers from the Federal Reserve. Given the increased attention paid to inflation and monetary policy, comments from Fed officials will be closely scrutinized for insights and indications on the future direction of economic policy.
This convergence of major events makes it an undeniably crucial week for bitcoin, the broader crypto market, and the traditional financial world. All eyes are on the aforementioned developments to decipher their potential ripple effects on the markets.
At the time of publication, btc was trading at $27,790.
Featured image from Shutterstock, chart from TradingView.com
