Analyst Warns: Bitcoin ETF Rejection Could Trigger Market “Rugpull”

Connect with us

The SEC is expected to decide on the approval of a physically-backed Bitcoin ETF next month, which could have a huge impact on the crypto market.

Analyst Nate Geraci warns of a possible “rug pull” if the ETF is not approved, but remains optimistic about the chances of approval.

The crypto sphere holds its breath as the US Securities and Exchange Commission (SEC) prepares to deliver a verdict on Bitcoin ETFs, a decision with the power to rocket the market towards mainstream finance or trigger a devastating price crash. With Bitcoin hovering near $40,000, Prominent analyst Nate warns of a potential “biggest rug pull in history” if the ETF applications are denied.

However, the crypto community is hopeful that the SEC will finally approve a Bitcoin ETF, as the regulator has shown some signs of warming up to the idea. For instance, the SEC has recently approved several Bitcoin futures ETFs, which track the price of Bitcoin futures contracts rather than Bitcoin itself. These products have attracted significant interest and inflows from investors, indicating a strong demand for Bitcoin exposure.

What Are the Risks and Rewards of a Bitcoin ETF?

If the SEC approves a Bitcoin ETF, it could trigger a massive rally in the crypto market, as more investors would flock to buy Bitcoin and other cryptocurrencies. A Bitcoin ETF would also reduce the barriers and risks of investing in crypto, such as hacking, theft, or loss of private keys. Additionally, a BTC ETF would provide more transparency and liquidity to the Bitcoin market, as well as more regulatory oversight and protection for investors.

On the other hand, if the SEC rejects or delays the approval of a Bitcoin ETF, it could cause a sharp sell-off in the crypto market, as investors would lose confidence and optimism in the future of Bitcoin. This scenario is what analyst Nate Geraci calls a “rug pull”, which means a sudden and drastic drop in price. Geraci, who is the president of The ETF Store and the host of the podcast ETF Prime, believes that the approval of a Bitcoin ETF is close to 100%, but warns that the rejection of a Bitcoin ETF could be one of the biggest rug pulls in crypto history.

Moreover, the SEC has a new chairman, Gary Gensler, who is considered to be more crypto-friendly than his predecessor. Gensler has taught courses on blockchain and digital currencies at MIT and has expressed his interest in fostering innovation and regulation in the crypto space.

Moreover, the approval of a BTC ETF is not a done deal, as the SEC still has some reservations and questions about the underlying Bitcoin market. The SEC has also asked for public comments on the ETF proposals, which could indicate that it is still gathering information and opinions before making a final decision.

Therefore, the SEC’s decision on ETF approval is a critical moment for the crypto industry, as it could either boost or hurt the growth and adoption of Bitcoin and other cryptocurrencies. Investors should be prepared for both outcomes and weigh the risks and rewards of investing in a Bitcoin ETF.