Crypto in Crisis: SEC’s Bitcoin ETF Decision Could Trigger Massive Market Turbulence

• One analyst believes that if the SEC refuses to approve a Bitcoin spot ETF in January, we could see the biggest rug pull in crypto history, and Bitcoin could make a historic dump.
• However, he believes there’s almost no chance that Gary Gensler will throw out the ETF applications this time, with the Grayscale lawsuit victory the most critical factor.

The entire cryptocurrency industry is counting the days until mid-January when the US SEC finally makes its decision on the Bitcoin spot ETF applications public. Every other trader, analyst, and enthusiast is optimistic that the time has come for the ETF, but what if Gary Gensler dismisses the applications? According to one ETF expert, this could precipitate one of the biggest rug pulls in the history of cryptocurrencies.

The SEC will approve or deny the applications between January 5 and 10. Some of the companies expecting a decision include Grayscale, a subsidiary of crypto giant DCG; ARK & 21Shares; asset management behemoth BlackRock; and VanEck.

On the off chance that Gensler says no, we could be headed for the biggest disaster in crypto history, says Nate Geraci. The ETF expert, who runs the investment advisory firm ETF Store, stated on X that “if spot bitcoin ETF is not approved in January, might be one of bigger rug pulls in crypto history…”

He acknowledged that it’s unlikely Gensler will turn around and deny all the applications (there are over a dozen). However, history has proven that the former CFTC chair is against crypto spot ETFs, so it’s not unimaginable that he decided to rule against the applications despite the overwhelming signs that the time has come.

However, Nate believes that a spot ETF is done, and all that remains is the official announcement. According to the ETF veteran, the crypto industry won its ETF battle when a bench of judges in Washington, D.C., ruled that Gensler had no right to throw out Grayscale’s application to turn its BTC trust into an ETF.

If spot bitcoin ETF not approved in January, might be one of bigger rug pulls in crypto history…

Not my base case, but can’t entirely rule out given history here (which is why I said *close* to 100%).

That said, sticking w/ my original pre-Grayscale court victory prediction. https://t.co/zhlLDgMlzw

— Nate Geraci (@NateGeraci) December 18, 2023

Is the Bitcoin Spot ETF a Guarantee?

While Geraci contemplates what the outcome of a denial would be, other experts have been discussing what will happen once the ETF is approved.

In one study, New York-based investment bank and asset manager Needham & Company found that registered investment advisors will be the main driver of Bitcoin ETF inflows once it’s approved next year.

Currently, advisors have little to no access to Bitcoin for their clients. The survey found that these advisors can only direct their clients to purchase the crypto via exchanges like Coinbase or refrain from crypto altogether.

John Todaro, an analyst at the bank, stated:

The main driver of a Bitcoin ETF, in our view, will be RIAs. With nearly half of our advisors answering that their current bitcoin offering is either nonexistent or directing clients to buy bitcoin on their own at a crypto platform, we believe this is where most new buyers would come from.

The survey also found that the most interest in the ETF will be from clients who already own BTC in some form. Only 11% of respondents who haven’t owned BTC before said they would jump in after the ETF is approved.