Bitcoin was able to record its highest record levels this year, touching the level of $36,883 at the peak of the highs on Coinbase at approximately 4:40 am GMT. At the same time, Ethereum also touched its highest level since last July, at $1,930.
These spikes caused a sharp resurgence of short liquidations, according to data provided by CoinGlass. During the day alone, until 3:00 am, more than $51 million worth of short positions on bitcoin alone were liquidated, after about 12.5 million more were liquidated yesterday.
While the liquidation of Bitcoin long positions was relatively small compared to short positions. About $1.5 million had been liquidated by dawn today, in addition to $6.83 million yesterday.
Also, according to CoinGlass, we have seen further increases in the values of open interests on bitcoin futures as well. It reached about $17 billion at 10:00 this morning, which represents the highest levels since April of last year.
These gains came after a sudden rise in positive sentiment around the possibility of imminent approval for the launch of spot Bitcoin exchange-traded funds (ETFs) submitted by a number of major asset managers.
This sudden optimism came in turn with analysts from Bloomberg talking about a “window” extending between today and the 17th of this month for the possibility of approval by the US Securities and Exchange Commission (SEC) to launch these ETFs, including approval to convert the Grayscale Bitcoin Trust into an ETF.
Analysts also expect a 90% probability that the SEC will approve the launch of these ETFs on January 10 of next year.
While analysts stressed that it was just a possibility, it clearly showed part of the underlying sentiment of the markets that might overflow in the event of the actual launch of these ETFs.
But in reality, the SEC still has many opportunities to procrastinate, most of which may extend until March of next year, to decide on the application of asset managers, and it may face rejection in the end in the worst case.
We do not know what might happen, and the ongoing discussion is still in the realm of speculation. I also don’t know how that 90% was calculated, based on what? Is there a statistical model that predicts this probability?
Yes, launching these ETFs could pump hundreds of billions of dollars and expand the segment of potential investors in the crypto market. But I think it is a little early to be so optimistic at the present time without overcoming the most prominent obstacles to the growth of this market.
The biggest obstacles to the growth of the crypto market are not the investment instruments associated with it, but rather regulatory risks and the weak confidence. I do not see any possibility at the present time to overcome these obstacles.
Regulatory risks seem to remain forever and there is no immediate horizon for resolving major disputes between the SEC and companies operating in the sector, most notably Ripple Labs. It seems that time actually stops in the corridors of the courts.
The markets are counting on the outcomes of the ongoing legal conflict between the latter two to clarify the features of the regulatory environment for this market, and this will not be anytime soon, as we heard the CEO of the company speak yesterday, Brad Garlinghouse, about the desire to transfer the case to the Supreme Court.
On the other hand, fraudulent and piracy risks may remain present in this market, although they are somewhat small compared to the total value of the market as a whole, but they are still frequent. We witnessed talk of a hack on one of the CoinSpot crypto exchange wallets and the theft of 1,262 Ethereum, equivalent to $2.4 million.
This comes after more than $300 million was stolen last September, which represented the highest levels during the current year, according to data provided by DeFiLlama.
