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Weekly: (Not Quite) Back from Summer

Lack of clarity regarding when the US SEC might approve spot bitcoin ETPs continues to keep crypto markets on the back foot

September 8, 2023

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Key takeaways

  • We are in the middle of a traditionally weak period for many risk assets (i.e. the September Effect), and crypto is no exception
  • Selling pressure related to repayments by the Mt. Gox Rehabilitation Trust may also add to weaker bitcoin technicals

Written by

  • David Duong, CFA, Head of Institutional Research

Market View

The lack of clarity regarding when the US SEC might approve spot bitcoin exchange-traded products (ETPs) continues to keep crypto markets on the back foot, even after the favorable ruling for Grayscale Investments LLC last week by a panel of three DC Circuit Court of Appeals judges. On August 31, days after the Grayscale verdict, the SEC postponed its decisions on seven ETP applications until the next deadline (around October 16, 2023), although the government agency can ultimately continue deferring its decisions until mid-March 2024 (i.e. 240 days after the filings entered the Federal Register).

Moreover, the SEC has until October 13 to ask the full 11-active-judge US Court of Appeals for the DC Circuit to reconsider the outcome in the Grayscale case or appeal to the US Supreme Court. That uncertainty makes for a challenging trading environment in light of high opportunity costs, particularly as financial conditions are tightening. This has constrained liquidity despite the market implied probability of ETPs being approved having risen to near 80% over the last week, based on our estimates.

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Separately, we are in the middle of a traditionally weak period for many risk assets (i.e. the September Effect), and crypto is no exception. Selling pressure related to repayments by the Mt. Gox Rehabilitation Trust may also add to weaker bitcoin technicals, as the trustee is due to make disbursements by October 31, 2023. This includes 141,686 BTC, 142,846 BCH and JPY69.7B that need to be repaid to creditors. The total size of potential discretionary selling from this event depends on how many creditors have elected to receive early lump-sum repayments versus those that have opted for intermediate repayments (which would be made over time). Note that so far, no public disclosure has been made in regards to that distribution.

Offsetting the potential Mt.Gox related outflows may be Tether’s accumulation of bitcoin using 15% of its net realized operating profits from investments (i.e. not including asset appreciation), which the stablecoin issuer announced in May 2023. According to a Dune dashboard created by, Tether may have potentially acquired 15,915 bitcoin at the end of 1Q23 and another 1,530 bitcoin at the end of 2Q23. On a forward looking basis, however, it’s not clear how much additional bitcoin Tether may purchase in 3Q23.

Another factor that may limit bitcoin’s otherwise poor seasonals is that the token has already depreciated by 10.9% in August, while the seasonal factors supporting multilateral USD strength tend to wear off around early-to-mid-September. That said, we think seasonality matters less for the dollar’s prospects at the moment than what the Federal Reserve says at its next monetary policy meeting on September 19-20. Fed Chair Jerome Powell maintained a hawkish tone at the Jackson Hole Symposium, but we think the economic data is starting to look softer, labor data is normalizing and inflation may be trending lower. (August CPI data will be released on September 13 with a median Bloomberg survey forecast of 3.6% YoY.)

Finally, there seemed to be progress in the development of accounting rules for the cryptocurrency holdings of businesses, after the US Financial Accounting Standards Board (or FASB, which sets US Generally Accepted Accounting Principles or US GAAP) approved standards for measuring fair value of digital assets. We believe the guidance set by the FASB is meaningful, even though the rules only go into effect on December 14, 2024, as it offers more clarity for companies on how to handle digital assets on their balance sheets.

Crypto & Traditional Overview

(as of 4pm EDT, Sept 7)



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Coinbase Exchange & CES Insights

Traders are managing risk tightly as we head into September as it is a seasonally tough period for crypto. Flows over the past week have been skewed to the sell side across the majority of the more active tokens. SOL is one standout where we have seen increased interest on the buyside. A number of positive news headlines have helped sentiment. Visa announced it will introduce USDC settlement on the Solana blockchain. And MakerDAO proposed reimplementing the protocol on a new appchain forked from Solana.

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Notable Crypto News


  • Following SEC delays, ARK Invest and 21Shares file for spot Ether ETF (CoinTelegraph)
  • Visa expands stablecoin settlement options to Solana (The Block)
  • Genesis Hits Parent Company DCG With $600 Million Lawsuits (Decrypt)


  • Change to US accounting rules will be a boon to companies holding crypto in 2025 (CoinTelegraph)


  • MetaMask Introduces Bank and PayPal Cash-Out Options (Decrypt)
  • Story Protocol launches with $54 million round led by a16z to tap IP ownership (The Block)


  • Coinbase Creates New Crypto Lending Service Geared Toward Large Investors (Coindesk)
  • Online identity verification without big tech: how decentralized ID can help (Coinbase Blog)
  • 83% of major hubs are providing increasing regulatory clarity on crypto (Coinbase Blog)

Views From Around the World


According to CoinTelegraph, "lawmakers in the European Parliament voted overwhelmingly in support of the eighth iteration of the Directive on Administrative Cooperation (DAC8), a cryptocurrency tax reporting rule." EU documents indicate that DAC8 is meant to "empower tax collectors with the authority to track and assess all cryptocurrency transactions conducted by organizations or individuals within the member states." (CoinTelegraph)

CoinDesk reported that "Deutsche Bank is working with Taurus, a Swiss startup specializing in cryptocurrency safekeeping, to establish digital asset custody and tokenization services." (CoinDesk)


"Sony Network Communications, a subsidiary of the $106B multinational conglomerate, is teaming up with Astar Network’s spin-off, Startale Labs, to develop a blockchain," according to Defiant. Sony intends for the network to serve as a "backbone" of its blockchain-based offerings. (Defiant)

The Japanese government is set to ease regulations on financing for startups. Startups, when receiving funding from investment funds, will have the option to pay with cryptocurrencies, not limited to stocks and other assets. These new regulations apply to funds invested in Limited Partnership Enterprises (LPS). (Nikkei)

The Week Ahead

Sept 11

Sept 12

Sept 13

Sept 14

Sept 15

Notable Macro


ECB Rate Decision

US Retail Sales


U. of Mich. Sentiment

Notable Earnings

Oracle Corp


Permissionless 2023 starts 

Token2049 starts


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