Around two weeks ago, the XBT Provider AB Bitcoin ETN got a USD denomination and promised to give American institutional investors a window into the BTC and Ether markets. However, the U.S. Securities and Exchange Commission (SEC) has cut the party short by temporarily suspending American trading of the Exchange Traded Note (ETN). The SEC cited “inconsistencies in the language used to describe the product” as the reason for suspending American access to the ETN.
The ETN has been trading in Europe since 2015 and has over $418 million worth of assets under management. The SEC has been very negative towards Bitcoin ETFs lately, so this negative move towards an ETN that is thriving in Europe could be seen as bad news for the crypto markets.
The Securities and Exchange Commission announced the temporary suspension of trading in the securities Bitcoin Tracker One (“CXBTF”) and Ether Tracker One (“CETHF”) commencing at 5:30 pm EDT Sept. 9, 2018 and terminating at 11:59 pm EDT Sept. 20, 2018. https://t.co/5z1vEYFBFB
— SEC_News (@SEC_News) September 9, 2018
SEC Creating Negative Sentiment
The SEC has been a bit of a party pooper so far this year, declining a vast number of Bitcoin ETF applications and causing chaos in the crypto markets. It declined the Winklevoss twins application for an ETF twice already, and in August it declined nine more ETF applications. This negative news from the SEC has created a negative sentiment in the BTC price, with it beginning to play on investor’s minds. However, Coinbase has applied to launch its own BTC ETF and it might just work. Thanks to its experience and trade volumes – along with its advanced KYC and AML procedures – it has the upper hand when it comes to securing America’s first BTC ETF.
Institutional Investors Want Bitcoin Action
Every time a BTC ETF is rejected, the crypto markets react negatively. This indicates that there is an overwhelming demand from institutional investors for the product, especially amongst those that are blocked from investing in BTC in a conventional way. Companies like Hut 8 help bridge this gap by giving investors traditional stock market access to the crypto world. If a Bitcoin ETF was approved – or even an ETN at this point – we could see a lot of institutional money flow into the crypto markets, helping the market thrive.
The SEC appears to have a penchant for delivering negative news about crypto markets, but hopefully it will lift its ban on BTC ETN trading very soon. Investors that have money tied into the ETN will be worried, as they cannot move their funds and are locked in until the SEC reverses its decision. For anyone linked to the ETN, there could be some potentially worrying times ahead.
