Gary Gensler, chairman of the US Securities and Exchange Commission, has said that Bitcoin is a commodity, how can this impact its future?
SEC Chairman Gary Gensler has once again shaken up the crypto world following his latest remarks during an interview on CNBC. When asked about Grayscale's Bitcoin ETF application, the current SEC Chairman noted that while many financial assets have the key attribute of “asset,” Bitcoin can also be classified as a “commodity”.
On the other hand, the SEC chairman has not made any statements about any other cryptocurrency, avoiding talking about About Ethereum. This could be because considering Ethereum as a security or commodity is currently a Sticking point in SEC's $1.300 billion lawsuit against XRP.
Gensler's remarks have had an immediate effect on the price of Bitcoin and have cast doubt on the future of Grayscale's application, which hopes to Convert the Bitcoin Trust into an Exchange Traded Fund (ETF).
This is not the first time an SEC official has stated that Bitcoin is not a security. In 2018, William Hinman, the SEC's director for the Division of Corporation Finance, noted that he believed that Both Ethereum and Bitcoin should be classified as commodities, since each cryptocurrency was sufficiently decentralized and there was no central company “whose efforts are a determining factor in the enterprise.”
What does it mean for Bitcoin to be considered a commodity?
Among the crypto community, Gensler's words have resonated strongly. For some, like Bloomberg Intelligence ETF analyst James Seyffart, These comments are positive for the future of BitcoinHowever, it is also possible that the SEC will reject Grayscale's application for a Bitcoin spot ETF.
Eric Balchunas, an ETF analyst at Bloomberg, has a similar opinion, who also points out that there is only one 0,5% chance that SEC will accept ETF application Grayscale cash.
Michael Saylor has shared the video with the Gensler interview on his Twitter account, noting that Bitcoin will become an essential treasure reserve, which will allow governments and institutions to use it as a digital asset to grow their economies.
Blockchain Investment Group founder Eric Weiss notes on Twitter that Gensler is the Second SEC Chairman to Declare Bitcoin a Commodity, so it is very difficult for it to lose that rating in the future.
Could Bitcoin Recover?
Although Gary Gensler's statements have caused the bitcoin price has fallen slightly, some analysts have found some indicators that the price of Bitcoin could recover slightly.
The DeMark indicator
The DeMark indicator indicates that Most of the Bitcoin selling has already taken place. To determine whether a market trend has topped out, the study applies a counting technique to chart patterns. According to DeMark, Bitcoin has marked the highest of 13 counts on the downside, which could suggest an imminent rally.
Linear regression channel
This indicator is the one responsible for locate statistically unexpected deviations a line that most closely approximates a sequence of Bitcoin price changes. Currently, Bitcoin has fallen three standard deviations below an ascending regression line that began at the December 2018 lows, which is unusual and could indicate that the sell-off is peaking.
Relative Strength Index
This is a momentum indicator that could suggest that Bitcoin selling is set for a respite. At this time, it is at its lowest point since 2010 and has entered the “oversold” zone.
Analysts noted that the last time Bitcoin reached such oversold levels in 2018, Bitcoin started a bull run.
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