Bitcoin holds on to $30,000 and ETFs remain on the fence

The cryptocurrency market is mixed. Bitcoin (BTC) rebounds slightly in the last 24 hours and remains close to $30,500, while Ethereum (ETH) continues to fall and is moving away from $1,900.

Spot Bitcoin exchange-traded funds (ETFs) continue to grab most of the market headlines and define the direction of digital assets. The optimism is palpable, as major players such as BlackRock, Invesco, Fidelity and WisdomTree have filed applications for the U.S. Securities and Exchange Commission (SEC) to give these products the go-ahead.

"It has been about five years of steady denials of every crypto ETF filing, but now optimism is here that one of these financial giants will get one done before summer’s end," explained Edward Moya, senior market analyst at OANDA. However, other market observers believe that this approval could take longer than expected, even into next year.

Moya also commented that the crypto market is closely watching the lawsuit filed by Grayscale, a subsidiary of Digital Currency Group, against the SEC for its refusal to convert its Grayscale Bitcoin Trust (GBTC), the largest Bitcoin fund, into a spot Bitcoin ETF. According to the expert, some investors are optimistic that the company will prevail in court "before summer´s end."

The SEC in June 2022 rejected Grayscale's application to convert its flagship Bitcoin into an exchange-traded fund, arguing that the proposal did not comply with rules designed to prevent fraudulent practices and protect investors. Grayscale sued the SEC almost immediately after its proposal was denied, alleging that the regulator was acting arbitrarily in rejecting applications for spot Bitcoin ETFs when it had previously approved Bitcoin futures ETFs such as ProShares' BITO.

In recent days, the discount at which GBTC securities are trading has narrowed significantly to 30%. To find the last time GBTC closed at these levels, one has to go back to September 2022. It is also worth noting that GBTC securities have traded at a 50% discount, when between its inception in May 2015 and February 2021 it traded at an average premium of between 30% and 40%. In recent months, DCG was forced to sell part of its stake in the fund to deal with the Genesis restructuring process.

Positive news on this front could boost Bitcoin prices, which could climb remarkably according to Moya, especially considering that July has been a historically good month for the reigning cryptocurrency; over the past three years, BTC has risen 24%, 20% and 27% during this month. "lnitial resistance comes from the $34,000 level and if we do see a Bitcoin ETF approval institutional momentum could take the rally as high as the $40,000 level," the expert added.

"Any major setbacks with a BlackRock ETF rejection and a Grayscale defeat could temporarily kill the rally, but optimism will still remain that and the ETF will eventually get done," Moya concluded.

On the other hand, there´s also some other positive news in the space this week, as HSBC will allow its Hong Kong customers to buy and sell Bitcoin and Ethereum, reopening the market in a way that critics claimed would never happen. It is worth remembering that, since last June 1, Hong Kong has been applying new rules to regulate cryptocurrencies and has been positioning itself as the great hub of Asia.

As for the rest of the cryptocurrencies, there have been generalized falls. Cardano (ADA) and Solana (SOL) lose positions, while Ripple (XRP) and Dogecoin (DOGE) tried to hold their own.