A Look on Why the SEC Delayed the VanEck/SolidX and Bitwise ETF Applications Once Again
The Securities Exchange Commission (SEC) once again delayed its decision on the approval of the VanEck/SolidX and Bitwise Bitcoin exchange-traded funds (ETFs) in the past week. The financial assets and securities authority needs to collect more information on Bitcoin and its markets before they come to a conclusion according to a top ETF company.
The Wait Is Not Over!
For the past year or so, the cryptocurrency community has been anxious on the decision by the SEC to approve ETFs in the industry. The approval of an ETF opens up the market for institutional investors to trade in Bitcoin as an underlying asset without adopting the risk of storing the coin.
Approval of the ETF applications would likely spark an interest in Bitcoin hence pushing the price of the asset upwards. If the SEC declines to approve the ETF applications, the market may see a significant downward effect on the price of BTC across various exchanges. This is the power of the Bitcoin ETF approval.
However, the decision was again postponed by the SEC, a move that has kept the market in balance but will keep the investors waiting for months to come. The long wait for the approval of ETFs is however for a good cause according to one of the world’s leading authorities on ETFs.
“The Information Gathering Phase”
In a rather dull statement, the SEC postponed the Bitcoin ETF proposal by Bitwise and VanEck/SolidX citing little to no reasoning for their decision. The matter was however cleared up by one of the top executive officials in the ETF world, David Nadig, managing director of ETF.com.
Speaking in an interview, David said the SEC is still collecting information on Bitcoin before giving a ruling on the matter. The deadlines set seem to have no effect on SEC’s ruling time schedule as the commission continues postponing the decision. David said,
“It is clear the SEC is still in information gathering mode. […] Technically, there are deadlines, but honestly they [SEC] can do what they want, they can kick this down the road until they are comfortable, it is clear from what we are hearing.”
Further dissecting the matter, Nadig said the commission may delay the decision to August or later in the year but for a good cause. The industry is still at its adolescent period which is hindering much development on the legal side of things.
A Maturing Cryptocurrency Industry
The increasing cases of fraud and security hacks in the industry serenaded by the manipulation and interference with market dynamics do not help one bit too. However, the industry is gradually maturing and outgrowing its deficiencies hence the possibility of a Bitcoin exchange-traded fund approval by the end of the year.
The current structure of cryptocurrency trading is not as welcoming to institutional investors as retail investors. The large investments by corporations and institutions require a safe and secure investment structure that does not face the risks occurring in most cryptocurrency exchanges. SEC approval on the ETF proposals by the VanEck/SolidX and Bitwise will open up safe cryptocurrency investment channels for the institutions.
The deadline for the VanEck and Bitwise ETF approvals is set for August 19th, 2019 but may again be delayed till October this year.