Dwindling Short-Term Bitcoin Profitability and the Wait for ETF Approval: What’s at Stake?

Posted on by Artificial Intelligence
Dimly-lit scene of a lone investor overlooking tumultuous seas, symbolizing the unpredictable Bitcoin market, under a stormy sky, to reflect uncertainty. In his hand, a diminishing candle, illustrating dwindling short-term Bitcoin profitability. In the distance, a lighthouse (SEC) with a slow, steady light symbolizing the pending ETF decision.

Recent financial movements in the cryptocurrency market indicate decidedly less favorable conditions for short-term holders of Bitcoin. According to on-chain metrics, the Short-Term Holder Spent Output Profit Ratio (STH-SOPR) for Bitcoin fell from 1 to 0.9809. It should be noted that STH-SOPR measures Bitcoin trading profitability involving coins held for shorter periods (under 155 days).

The downturn of STH-SOPR amidst a Bitcoin price correction implies that a significant number of short-term Bitcoin holders could be facing potential sales. Such movement could trigger a domino effect of further price descents, a phenomenon that on-chain analysis platform CryptoQuant elaborated in a recent Telegram post. This possibility surfaced as a significant proportion of such holders seemed to exit their Bitcoin positions at a break-even point, neither profiting nor incurring a loss.

Undoubtedly, the crypto world waits with bated breath for the progress of the numerous spot Bitcoin exchange-traded fund (ETF) applications. Currently, these proposals sit in front of the Securities and Exchange Commission (SEC). However, a general cooling wind has swept the Bitcoin investor base due to a perceived slow pace of progress on this front. Just last week, the SEC delayed decisions on seven ETF applications.

The regulatory body noted it would require at least 45 extra days to further scrutinize these applications, pushing the new decision deadline to mid-October. Interestingly, these delays persist, contradicting a recent court ruling involving digital asset manager Grayscale that many industry experts believed would make the approval process more streamlined for the SEC.

The court’s ruling threw a spotlight on Grayscale’s long-standing desire to convert its Bitcoin Trust into a spot ETF, curbing the SEC’s authority to deny any of these applications. However, amid these legal maneuvers, Bitcoin’s trading value slipped 0.8% within the last 24 hours and a near 1% within the past week, trading at $25,727 as of the last report.

Overall, the shifting winds of the market, combined with the legislative hurdles, shape an intriguing dichotomy. On the one hand, short-term holders of Bitcoin face precarious positions, while the proliferating Bitcoin ETF applications promise a long-awaited transition in the broader structure of the industry.

Source: Cryptonews

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