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Bitcoin activity surges as US Treasury and courts support crypto against SEC

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It’s a different week for the cryptocurrency market as Bitcoin and most other cryptocurrencies are experiencing a sharp increase in trading.

It is important to bear in mind that Bitcoin and other leading cryptocurrencies are operating in a very news-driven market, with much credibility in the asset class currently being staked on regulatory developments.

Bitcoin led a surge in cryptocurrency prices this week after a US court supported investment trust Grayscale Investments (GBTC) against the Securities and Exchange Commission regarding the company’s request for a Bitcoin ETF. This came after the Treasury Department proposed new rules for cryptocurrency taxes last Friday.

Starting in 2026, cryptocurrency currency exchanges will provide annual 1099 reports to the IRS and taxpayers, disclosing total transactional revenue. In 2027, companies will be required to report the amount customers paid for cryptocurrency assets or their cost basis. This move is expected to provide credibility and significant investor confidence in the cryptocurrency markets.

“I believe that court decisions and positive legal news related to cryptocurrency assets like Bitcoin will undoubtedly impact their prices,” said Rania Gule, a market analyst with XS.com. “The court’s support for the Grayscale ETF is seen as an encouragement for further institutional investment products for cryptocurrencies. This could lead to increased interest from investors and major institutions in the market, potentially driving up demand for Bitcoin and other cryptocurrencies and assets.”

However, it’s important to note that the impact of this news depends on various factors, including general economic conditions, developments in regulations related to cryptocurrency markets, and technical factors within the market.

It’s also crucial to recognize that the price of Bitcoin is subject to extreme volatility and rapid changes regardless of individual news events.

Are Bitcoin ETFs an inevitability?

Bitcoin exchange-traded funds are being regards as an inevitability in many areas of the institutional market, which will send the price of the cryptocurrency soaring. T

he downside scenario for many BTC traders right now is that the SEC, and particularly its chair, Gary Gensler, will somehow successfully stamp out cryptocurrency as an asset class. ETF approval is being seen as the key battleground in the tug of war between the regulators and, I believe, the many institutional market participants which are lobbying hard for them behind the scenes (including several big Wall Street investment banks which have a big stake in the game).

This is a landmark legal win for crypto against the US regulator. The court’s decision destroys the SEC’s central argument for rejecting every spot Bitcoin ETF over the last few years. This win paves the way for Bitcoin ETFs.

Following the monumental ruling, there’s very little chance now the SEC will block the launch of ETFs. A swathe of big-name asset managers, among others, have filed ETF applications for Bitcoin ETFs and we expect that the SEC will organise a block approval of applications that meet requirements, as it will not want to be seen as a kingmaker.

“We believe that Bitcoin ETFs are now an inevitability,” said Nigel Green, CEO of wealth manager deVere. “And they could come to market sooner than many anticipate.”


How will Bitcoin react to  ETF approvals?

The deVere chief executive believes that the price of crypto will jump if/when Bitcoin ETFs are launched for three reasons.

First, if Bitcoin ETFs are approved, it would open up the cryptocurrency market to a broader range of investors who might have been hesitant to directly invest in digital assets. This influx of new capital from institutional and retail investors could drive up demand for Bitcoin, leading to an increase in its price.

Second, ETFs typically involve the purchase of the underlying asset by the fund managers. If Bitcoin ETFs follow this structure, it could create a substantial demand for actual Bitcoins to back the ETF shares. This increased demand, coupled with the limited supply of Bitcoin (capped at 21 million coins), could lead to a supply-demand imbalance, resulting in a price surge.

And third, the launch of Bitcoin ETFs might improve the overall perception of cryptocurrencies in the eyes of regulators and traditional financial institutions. This increased legitimacy could attract more conservative investors who were previously wary of the regulatory uncertainties surrounding cryptocurrencies. As more institutional money flows into the market through ETFs, the price of Bitcoin would experience upward pressure.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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