The cryptocurrency rally shows no signs of stopping, with Bitcoin and various altcoins continuing to trade in positive territory. Bitcoin saw a 6% increase in the last 24 hours, while meme cryptos Dogecoin and Shiba Inu saw respective gains of 4.9% and 5.6%. Other altcoins such as Algorand and Lido DAO also experienced significant surges of 11% and 5.5% respectively.
Although there was no major news affecting the crypto market on that particular day, rallies tend to extend when there is a lack of significant developments. However, one notable development to watch is the regulatory announcement regarding spot crypto ETFs issued by the U.S. Securities and Exchange Commission (SEC) on Wednesday.
The SEC announced a delay in the decision on whether to allow Hashdex to convert its Bitcoin futures exchange-traded fund (ETF) into a spot ETF. Spot crypto ETFs are highly sought after as they would enable companies to directly invest in cryptocurrencies. Currently, they can only mimic crypto price movements through various methods. Spot crypto ETFs would be appealing to many investors who want to avoid the complexities of owning cryptocurrencies themselves.
There are several financial-services companies competing to list spot crypto ETFs on exchanges. Some, like Hashdex, are seeking conversions, while others are creating new securities. The SEC also postponed its decision on Grayscale Investment’s proposal for the Grayscale Ethereum Futures Trust, another example of a spot crypto ETF.
The delay by the SEC does not necessarily mean a rejection, and it keeps spot crypto ETFs as a topic of conversation in influential crypto forums. It also serves as a reminder that there are well-capitalized companies eager for approval of such assets.
Investors are also encouraged by the October consumer price index (CPI) data, which showed inflation cooling more than expected. This leads experts and investors to believe that the Federal Reserve may refrain from raising interest rates. Lower interest rates, or even the possibility of further decreases if inflation continues to decline, benefit cryptocurrencies and related assets. Investors tend to take on more risk when they believe that traditionally “safe” assets, such as the U.S. government’s treasury notes, will not yield significant returns.
Disclosure: Eric Volkman holds positions in Bitcoin and Ethereum. The Motley Fool also holds positions in and recommends Bitcoin, Ethereum, and Lido DAO.
