Sunday effect sends crypto crashing on weekends, meaning it may never mainstream

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Have you ever heard of the Sunday effect? Lately, it seems like every weekend crypto stocks are dropping and this is a trend with major ramifications for the future of crypto as a serious competitor in investing.

See: 4 Best Places to Buy and Sell CryptocurrencyFind: How Cryptocurrency Works and Is It Safe?

Investors and investment managers have been eagerly awaiting a decision from the Securities and Exchange Commission on the approval of exchange-traded funds or Bitcoin ETFs, which are expected to be traded on an exchange, i.e. on the stock exchange (and therefore, only during the opening hours of the stock exchange). Currently, cryptos do not have such limitations and can be traded at any time.

If the price of Bitcoin drops sharply on a Saturday, investors in a Bitcoin ETF would theoretically be trapped in that fund until the market opens on Monday. If there is a spike, they should wait to make a profit, Fortune reports. So an ETF could turn Bitcoin into a more common option, but could also spell disaster for those trapped in the weekend waiting pattern.

Investors keen to hear about this crypto ETF will likely have to wait a while. Several companies have filed with the SEC, but the Commission has rejected or delayed its decisions on many of them. VanEck, for example, registered his ETF in March, and the SEC typically takes 45 days to approve or disapprove a deposit. In a statement in April, the Commission said it was extending the period that should have ended on May 3 and postponed it to June 17. And WisdomTree, whose Bitcoin ETF was registered in April, saw its decision pushed back to July 14 from May 30, according to an SEC notice.

The Commission considers it appropriate to designate a longer period for taking action on the proposed rule change so that there is sufficient time to consider the proposed rule change and the comments received, according to the statement to the Commission. time.

The Financial Times reports that SEC Chairman Gary Gensler has dampened hopes of a speedy Bitcoin ETF approval this year. In testimony before the House of Representatives financial services subcommittee last week, Gensler said there are many challenges and gaps in investor protection in [crypto] markets, according to the report.

The story continues

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The move from Bitcoin to the general public is a game-changer for the financial world and revolutionizes the way we view money in tomorrow’s economy, David Grasso, CEO of Bold TV, told GOBankingRates in April. Still, I don’t think it’s surprising that the government, especially regulators, is proceeding with caution. Creating adequate surveillance is not an easy task and I do not envy those who make these calls. Excessive regulation can distort markets and lead to serious consequences, while insufficient regulation can create systemic problems and fuel social problems, added Grasso.

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This article originally appeared on GOBankingRates.com: The Sunday Effect Sends A Crypto Crash On The Weekend, Meaning It Might Never Generalize

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