Bitcoin ETF and SEC: Discussion Still to Come
Bitcoin investment funds or Bitcoin ETFs, which the US Securities and Exchange Commission does not want to support, have been the main topic of many months for the cryptocurrency industry. The SEC's refusal creates investor distrust in Bitcoin. We will talk about this today with the guest of Fortrader magazine, leading analyst of RoboForex, Dmitry Gurkovsky.
- Hello Dmitry. Bitcoin is on the verge of reaching new lows today. The reason is the SEC's delay in making a decision on ETFs. Could you explain why the Commission's decision is so important for the cryptocurrency market?
- Good afternoon, Yulia. The US Securities and Exchange Commission (SEC) is considering introducing a Bitcoin ETF. This process is lengthy and complex: firstly, because in the United States there is still no consensus on the classification of Bitcoin as an asset, a currency, or something in between. Previously, the SEC said that Bitcoin is neither the first nor the second, therefore it is not subject to regulation and, in fact, it is beyond the bounds of the law. Considering a Bitcoin ETF means the Commission could allow funds based on cryptocurrency investments to operate.
This is important, because the “top priority” now is not even the emergence of cryptocurrency to a fundamentally new trading level, but confirmation that this asset is a priori not speculative. So far, ProShares and the other companies that initiated the review have failed to prove that the market can resist manipulation. However, I think there is still more to come.
— Do you think the SEC will eventually give permission? And why?
— There is a chance that the SEC will make a positive decision, but there is also a high probability that it will be very “narrow” and will allow only one ETF to be circulated. It is important now that supervisors are confident that there is no scope for manipulation of cryptocurrency prices. Once these “gates” are open, progress will go much faster.
The SEC's refusal to ProShares only means that the main discussion is still ahead.
— How will the Bitcoin exchange rate and the digital coin industry as a whole change after this?
— A positive decision (in the global sense) will allow cryptocurrencies to grow, a negative one will temporarily stop the purchase of Bitcoin and altcoins due to possible problems with trust in the virtual currency.
— How do you see the Bitcoin rate if the SEC gives permission and if it doesn’t?
— If the SEC makes a positive decision, Bitcoin and altcoins will increase in price, at least locally. A negative decision will force investors to sell or, at best, to “sit back” without moving and wait for the market to stabilize.
For Bitcoin, the “fork” of fluctuations can be very wide: 4,500 - 8,500 USD for the next 3 months, for example. It is worth remembering that, given a reason, the price of cryptocurrency can change much faster than conventional fiat assets.
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Bitcoin is falling precipitously - the SEC has postponed the decision on Bitcoin ETFs to September 30
Bitcoin began to decline sharply late Tuesday, falling $500 in a matter of hours, from $7,100 to $6,600 on the back of unexpected news.
The US Securities and Exchange Commission (SEC) has delayed its decision on the Bitcoin ETF of VanEck and SolidX for more than a month, until September 30. This is stated in a document published on Tuesday, August 7, on the Commission’s website, forklog reports.
Officials indicate they need more time to consider whether they should approve the launch of the first exchange-traded cryptocurrency fund of its kind in the United States. Previously, the SEC has already used its powers to postpone the consideration of applications for the creation of a Bitcoin ETF.
“The Commission therefore sets September 30, 2020 as the date by which the Commission must render an affirmative or negative decision or initiate further proceedings to decide on the proposed rule change,” the regulator writes.
The Commission's meeting, at which officials would decide on changes to trading rules on the Chicago Board Options Exchange (CBOE), where the fund was to be traded, was originally expected to take place on August 10. However, this date has now been postponed.
The proposed rule change, if approved, will be a key point for the future fate of the Bitcoin ETF in the United States in general and the VanEck and SolidX instrument, which could be released on the CBOE exchange, in particular, notes ttrcoin.
The companies submitted an application on June 6, after which the SEC began collecting comments, having received many arguments from the cryptocurrency community in favor of the need for such a tool and the market’s readiness to accept it.
If approved, VanEck SolidX Bitcoin Trust will be insured against theft and loss of access to funds. It will also be tied to a new index from Van Eck that, instead of exchanges, will collect the price of Bitcoin from US-based over-the-counter (OTC) platforms.
The VanEck SolidX Bitcoin Trust share price will be set at $200,000, indicating that the new ETF is primarily aimed at institutional investors. Previously, an anonymous source at the SEC made it clear that the agency was interested in approving this application.
The decision to delay the application follows the SEC's refusal to allow the Winklevoss brothers to issue their own Bitcoin ETF, which attempted to appeal a previous refusal issued to them in March 2020.
Many community members are convinced that the launch of the first Bitcoin ETF will take place no earlier than spring 2020. The deadline for the SEC to make its decision is early March.
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All controversial issues with the SEC Commission on Bitcoin ETFs have been resolved, insider from Cboe
As the Abacus Journal resource writes, citing unnamed insiders at the Chicago Stock Exchange (Cboe), approval of a Bitcoin ETF is inevitable. According to sources, VanEck, SolidX and Cboe have resolved all controversial issues in dialogue with the US Securities and Exchange Commission (SEC), so a positive decision from the regulator is only a matter of time.
Sources clarify that their opinion is based on the discussions that have been ongoing since the meeting of SEC Commissioner Elad Roizman with representatives of Cboe, VanEck and SolidX, held on October 9. Roizman is the first representative of an American financial regulator to publicly meet with representatives of the three groups.
According to journalists from Abacus Journal, who rely on data from investment manager @CryptoQF, representatives of VanEck, SolidX and Cboe reported on the resolution of “issues” that, according to the SEC, prevented the approval of a Bitcoin ETF.
- First, they presented the Commissioner with evidence that there was already a significant regulated Bitcoin derivatives market.
- Secondly, they noted that the markets whose operation is essential for Bitcoin ETFs (Cboe, Bitcoin futures, over-the-counter trading platforms) have been regulated.
- Third, they say, concerns about possible price manipulation have been alleviated by the approval of commodity ETPs.
- Fourth, Cboe has issued rules against potential stock manipulation and is committed to providing investors with protection.
Roizman is one of the few representatives of American regulators who are favorable to cryptocurrencies. Esther Pierce stands in the same row with him. Commissioner Kara Stein, who has voted against Bitcoin ETFs in the past, is expected to leave her post in December. According to rumors, Democratic Party representative Allison Lee will take her place. Journalists believe that between Stein's departure and Lee's appointment, the commission may approve a Bitcoin ETF.
Noting that VanEck took care of investor protection, the publication writes that its sources at Cboe view the approval of a Bitcoin ETF as inevitable. The same sources are firmly convinced that the SEC will be the first to approve the Bitcoin ETF from VanEck.
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The decision on three Bitcoin ETFs submitted to the SEC has been postponed until the fall
The US Securities and Exchange Commission (SEC) on Monday delayed decisions on three applications to launch Bitcoin-based exchange-traded funds (ETFs). CoinDesk reports this.
Compiled in conjunction with NYSE Arca and Cboe BZX, applications from asset managers Bitwise Asset Management, VanEck/SolidX and Wilshire Phoenix involve the launch of the first regulated ETFs in the United States. These applications were published in the Federal Register in February and June and from then on the Commission has 240 days to make a final decision
The final decision deadlines for the Bitwise and VanEck/SolidX applications are October 13 and October 18, respectively. A decision on Wilshire Phoenix's application will be made on September 29.
Over the past few years, various companies have sought SEC approval to launch exchange-traded funds, but each time the regulator has refused. Most often, the reasons for the negative decision were explained by the risks of market manipulation and insufficiently developed market control tools.
In an attempt to allay the SEC's concerns, Bitwise has published several reports stating that, contrary to popular belief, the real Bitcoin market is not that large, is somewhat transparent, and is quite efficient, aside from some exchanges with fake trading volumes.
We also note that Bitwise's ETF proposal has received support from more than 30 prominent industry representatives, including Blockchain Capital, Castle Island Ventures and Coinbase Custody.
It is quite noteworthy that this time Bitcoin did not react at all to the SEC’s negative decision - the price remained stuck in a narrow sideways range:
It is possible that the majority of market participants have already come to terms with the generally negative decisions of the SEC. However, if the Commission accidentally approves at least one of the applications in the fall, there could be a sharp revival in the market.
Let us remind you that, according to some data, the SEC may classify the Libra project from the largest social network Facebook as an ETF.
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