If you woke up this morning and saw Bitcoin – and virtually every other crypto – in the red, you’re probably wondering why. No, there wasn’t another exchange hack, this time it came in the form of the SEC announcing it’s postponing its decision on a Bitcoin ETF until the end of September. The latest ETF to get postponed has been created by investment firm VanEck and financial services company SolidX. If it is approved, it will be listed on the Chicago Board of Exchange (CBOE) BZX Equities Exchange. Bitcoin ETFs are a hot topic in the crypto space and the race is on for America’s first Bitcoin ETF.
America Really Wants a Bitcoin ETF
Every time the SEC delays its decision about a Bitcoin ETF, the crypto markets react negatively. This morning, Bitcoin fell just over $500 and the rest of the crypto markets fell with it. This strongly suggests that there is a link between the price drop and the SEC postponing its decision. America is often looked to as the land of advanced technology and being the first to the party. However, when it comes to launching Bitcoin ETFs. America is a little late to the dance. Europe has had multiple Bitcoin ETFs dating as far back as 2015 – many of these are even available to be traded on most European stock trading apps. There are certain rules and laws when it comes to investing in America, meaning that many investors cannot access the European ETFs – so America is desperate for its own Bitcoin ETF.
Institutionally Targeted Bitcoin ETF
While most Bitcoin ETFs are given reasonable prices for the average investor, this ETF’s shares are set to be priced at a whopping $200,000. The CEO of SolidX said that the high price was due to the fact the ETF is targeted towards institutional investors rather than the masses. This again could have caused further negative sentiment within the cryptocurrency market, as whales pulled their money out in anger at the SEC.
Not the First Bitcoin ETF to be Declined
Unfortunately, the crypto world has been hearing negative news coming from the SEC regarding Bitcoin ETFs for some time now. The Winklevoss twins have had their Bitcoin ETF declined twice, the first time in March 2017, and the second only a couple of weeks ago. Direxion’s Bitcoin ETF wasn’t declined, but in fact postponed until 21st September, which is the latest date a verdict can be made about the ETF.
The crypto community has only heard negative news, and this could be playing on the minds of crypto investors. With just over a month to go until the SEC makes its final verdict on the Direxion Bitcoin ETF, crypto investors are waiting with baited breath. If the SEC declines this application as well, we could see further turmoil in the crypto markets. However, if the SEC decides to grant the ETF, the crypto markets could be set for bumper gains.
The SEC keeps quoting its famous line that the Bitcoin market is largely unregulated and open to manipulation beyond the exchanges control as its reason for delaying the decision. If the SEC changes its opinion – or an exchange can prove they have a certain degree of control over market manipulation – the implications for the crypto industry would be huge. It could open the floodgates to mass adoption of cryptocurrencies as legal forms of payments around the globe, and we would witness possibly the largest bull run to date.
For now, all eyes are on the SEC as it mulls over the details, as investors and traders wait anxiously on any ETF decision.