Bitcoin ETF Approval “Nearly Certain” as SEC and CFTC Sources Weigh In
A Bitcoin ETF is “Nearly Certain” to Win Approval in 2018
ZeroHedge generated a storm of attention across the crypto community today when it cited “two sources” that seem to be “nearly certain” that a bitcoin ETF will win approval by the end of 2018.
ZeroHedge, a website known for its alternative reporting, unique financial news, and reporting of conspiracy theories, claims that a bitcoin ETF will be approved by the end of this year.
The website cited “two sources” connected to the issue.
“Working back channels at the SEC and the CFTC in particular, we’ve come across two sources that seem to be ‘nearly certain’ that the crypto ETF conversation is about to take a seriously bullish turn,” reported Zero Hedge earlier today.
“Both sources said that the ‘nearly certain’ approval of a Bitcoin ETF and other crypto ETF products will be announced alongside the first set of crypto regulations of substance from both the SEC and the CFTC.”
In other words, the SEC and CFTC are preparing to announce a huge new wave of cryptocurrency-related regulations before the end of the year.
Regulation will be a good thing for the crypto industry – and also a major turning point. To date, the industry has been largely unregulated. After launching in 2009, bitcoin was easy to ignore for several years. Today, the crypto space has become too big to ignore, and regulators are facing increased pressure to take action.
The two sources appear to be current or former employees of the SEC or CFTC.
The first source is described by Zero Hedge as its “most optimistic source.” That source is connected to the CFTC. The source reportedly said:
“I would call it 90% at this point. The crypto markets have moderated and regulators have watched the lack of drama surrounding Bitcoin futures across several global exchanges. The price moderation and adoption of a ‘peer product’ is what the conversations have centered around. In January we were justifiably concerned about a bubble and the harm a quickly approved product could attract speculators and create losses that led to significant lawsuits. Now, those factors seem to be mitigated significantly.”
Meanwhile, the second source is a former SEC employee who quit two weeks ago. He’s less optimistic than the CFTC source, but still indicated that regulation is likely forthcoming. This source specifically points to September 2018 as an important month to watch:
“I would expect a positive outcome in September – or if it gets strung out a little further it is simply a few ‘dotted i’s and crossed t’s’ are being finalized on larger regulatory language in the crypto space. To be clear, most of the regulation will be first focused on ICO’s and the issues those pose for retail investors at the moment. US residents are sending money to all sorts of exotic locations to invest in unregulated instruments with absolutely zero recourse for losing every cent they’ve put at risk. ICO regulation will begin to solve those issues and keep client assets ‘onshore’.”
The overall theme from the two sources is that regulators have been closely watching the markets over the last year to determine if and how regulation could work. These regulators have watched things like the launch of bitcoin futures ETFs – something that occurred without significant fanfare or controversy. They’ve also watched markets rise and fall without a surge in lawsuits against ICO companies. Based on all of this information, the regulatory agencies feel comfortable in announcing forthcoming regulations in the space – at least, if Zero Hedge’s two sources are to be believed.
If the regulatory agencies announce new regulations for the crypto industry, it will undoubtedly cause a surge of applications and activity within the space. It’s widely believed that institutional investors – including some of the biggest names on Wall Street – are just waiting for regulated custody services and other regulations to emerge before diving into the space.
“The regulatory agencies are fully aware that once this door is cracked open it will create a flood of submissions, approvals, new products in every color, shade, and denomination connected to crypto,” explains Zero Hedge.
“We are essentially being told that an approval is all but guaranteed,” the article concludes.
The Zero Hedge article, like every other article on the website, was written under the pseudonym Tyler Durden.
If you believe Zero Hedge – and let’s be honest, you should be skeptical of much of the information posted on the website – then the first crypto ETFs are right around the corner. Regulations could be announced as soon as September 2018. If Zero Hedge is to be believed, the SEC and CFTC will announce crypto regulations and the approval of a bitcoin ETF at approximately the same time, which could create the biggest day in the history of cryptocurrency markets.