Delay in SEC Bitcoin ETF Decision Sparks Massive Outflows

This article briefly:

A report from Coinshares suggests that the SEC's decision to delay the approval of a Bitcoin ETF triggered a sharp sell-off.

The report also noted that bitcoin and ethereum inflows reversed, resulting in outflows of $42 million and $9 million, respectively.

· Digital assets experienced an overall downturn, with outflows totaling $55 million, compared to inflows of $29 million the previous week.

A new report from CoinShares shows that the U.S. Securities and Exchange Commission (SEC) delayed its decision to approve a Bitcoin exchange-traded fund (ETF), leading to a sharp sell-off in Bitcoin.

"Disappointment with the SEC ETF decision weighed on market sentiment," the report said.

SEC uncertainty leads to sell-off

Last week, markets were impacted by the SEC’s decision to delay the approval of a Bitcoin ETF, according to a CoinShares report on Aug. 21:

“We see this as a response to recent media highlighting that the SEC will not make an immediate decision to allow US spot ETFs.”

The previous report for the week ending Aug. 11 highlighted bitcoin inflows of $27 million after three weeks of outflows. Bitcoin has once again experienced a net negative selloff over the past week:

“Bitcoin outflows totaled $42 million, reversing the previous week’s inflows, while shorting Bitcoin saw almost the 17th consecutive week of outflows,” the report said.

Bitcoin price 7-day chart. Source: BeInCrypto

Status and setbacks for Ethereum ETFs

It's not just Bitcoin that's shifting. Ethereum, which saw inflows of $2.5 million last week, also resumed outflows:

Despite recent reports that the U.S. Securities and Exchange Commission (SEC) hopes to approve an ethereum futures ETF as early as October, the report stated that “Ethereum saw $9 million in outflows.”

Compared with the previous week, the overall trend of digital assets has changed significantly. Inflows reached $29 million last week as US inflation data came in slightly below forecasts.

However, this week showed a massive outflow of $55 million.

Source of digital asset traffic for the week ended August 18: CoinShares

Three more of the top 20 cryptocurrencies by market capitalization saw outflows in the week ended Aug. 18:

“Polygon, Litecoin, and Polkadot also saw outflows of $900,000, $600,000, and $500,000, respectively,” the report noted. On the other hand, XRP, which ranks fifth by market capitalization, saw weekly inflows.

This follows the recent conclusion of a 2.5-year-long lawsuit between Ripple, the company behind XRP, and the SEC, in which XRP was deemed not to be a security when sold to individual investors. On Aug. 17, the ruling judge granted the SEC's appeal.