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Crypto Week: U.S. Lawmakers Push SEC to Approve spot Bitcoin-ETF

Bitcoin is mostly unchanged at $26,600 per coin this week. However, it is still below it highs of the last week demonstrating strong correlation with the stock market.

The 5% rise of Bitcoin prices in September was interrupted after the Federal Reserve (Fed) announced its hawkish interest rates dot plot forecast. The S&P 500 broad armlet index and Nasdaq 100 indexes lost around 3.5% since last Wednesday. The same could be said about the benchmark cryptocurrency up until early Wednesday. The decline of Bitcoin prices has also a strong correlation with the U.S. debt market. The U.S. 10-year Treasuries’ yields after the Fed meeting last week surged above 4.566%, which above record highs of 2007 at 4.5%. Bitcoin prices slightly recovered on Wednesday afternoon as the U.S. benchmark debt yields rolled back to 4.51%. It manifests the strong connection of crypto market trends with borrowing costs in the United States. This connection is not something positive for crypto assets now.

Fed is strongly committed to its “higher-for-longer” interest rates strategy, and may deliver another 0.25% interest rate hike to 5.75% this year. JPMorgan CEO Jamie Dimon is speculating about 7.00% Fed rate. With such sentiment in the market, investors are preparing for 10-year debt yields at 4.75%.

Nobody knows when the U.S. economy would break its neck and the Fed will be forced to retreat. It is not that important for now, as consensus suggests that interest rates will go higher. Without any dovish signals from the Fed, crypto market will continue to deteriorate.

Meanwhile, U.S. lawmakers are pushing Securities and Exchange Commission Chair Gary Gensler to approve spot Bitcoin-ETF ‘immediately’. According to Pantera Capital poll among more than 1000 crypto employees, 97% prefer to take their pay in fiat, while only 3% are ready to be paid in stablecoins or Bitcoins. These two stories may seem not to be related. But they are both point to a crypto winter and further decline of crypto assets’ prices. The express desire of U.S. lawmakers to get spot Bitcoin-ETF approved may manifest a nearing end of this crypto winter, as may want to be prepared for another crypto rally.

This idea is supported from technical point of view. When Bitcoin prices failed to hold above $28,000-30,000 per coin resistance level they rolled back, and are likely to move down to the nearest support at $19,000-21,000 per coin. They may dive even lower below $20,000 this December. However, crypto winter could be over after SEC should approve spot Bitcoin-ETF by January 11.