Bitcoin Investors Will Once Again Prepare for Possible ETF Approval Next Month
It could have been the biggest week in bitcoin's near ten year history. Or, it could be a total non-event, like it was today. Yes, once again, the crypto community ‘hedled' its breath for an approval of a bitcoin ETF but was denied not once but nine different times today.
The United States Securities and Exchange Commission is yet to approve any of the attempts to date and have more in the deny or delay procedure towards a bitcoin ETF coming up in the next few weeks. Namely the September 30, 2018 date (which if it goes like it went today) could be days or weeks before that before they throw the banhammer on it as well.
Of course there’s a chance that the CBOE VanEck SolidX ETF is approved by the SEC. Unlike the last ETF that was delayed, this latest ETF uses bitcoin futures contracts – not “physical” bitcoin and the VanEck and SolidX partnership (after each being denied individually) came together to formulate a new approach based on the data and feedback received independently.
If approved, it would be the first ever bitcoin-based ETF in history.
The SEC has until Thursday to make a decision about the ETF, according to the date on which the ETF was posted to the Federal Register.
This latest ETF is one of two ETFs being proposed by ProShares. ProShares has about $30 billion in assets under management. The company filed for two bitcoin ETFs in September. The ETFs plan to track bitcoin futures contracts traded on the Chicago Board of Options Exchange (Cboe) and will trade on NYSE Arca, according to the SEC filing.
The crypto community is excited about the potential for a bitcoin ETF. If an ETF is approved, it would instantly make it easier for new investors to get involved in the industry. This would theoretically attract new investors to bitcoin, pushing prices upward. Some believe that the approval of a bitcoin ETF could spark the biggest bull run in bitcoin history.
Earlier this summer, the price of bitcoin shot up 20% after a rumor that another ETF, the VanEck SolidX Bitcoin Trust ETF, would be approved in August. Bitcoin rose above $8,000 on the news before retreating after the decision was postponed.
This week’s price movements have been more subtle. Bitcoin has periodically experienced random price bumps over the past week, suddenly rising to the $6,700 or $6,800 range before retreating to its current price of around $6,300-$6,400 USD.
Based on bitcoin’s price movements since the decision was announced, it has stayed at $6,400 range hours after but doesn't mean come morning time when news spreads that this will be effecting the markets though hopefully it doesn’t seem like investors are expecting the bitcoin ETF not being approved should result in anything different. When it happens it happens.
Crypto experts like Nick Szabo and Andreas Antonopoulos have spoken out about the “SEC approves Bitcoin ETF” in a complete 180 degree point of view than most of the common/casual crypto culture is so bent on a SEC ‘yes' is going to the greatest thing ever ( #whenmoon ). Unlike with the previous ETF proposals, there wasn't as much hype surrounding the ProShares ETF proposal as there will be for the CBOE VanEck SolidX one will be. If there’s even a hint that the SEC is considering approving this next ETF, however, one might expect the markets to rise significantly in a short period of time due to the nature and gravity this could have if there is as much sidelined-money as some pundits put out there.
What Are the Chances of VanEck SolidX Bitcoin EFT Approval After ProShares Bitcoin ETF Denial?
Have things changed in the crypto community sufficiently enough for an ETF to be approved? Been there and done that right? Well as we saw and reported many times as the story line thickens, the SEC denying the ProShares ETF along with 2 other companies, Direxion and GraniteShares – did not cause a sudden effect but it is the land of a new financial frontier in which are many of the reasons sticking points for not approving any to date. Are markets different than they were the last time the SEC denied a bitcoin ETF?
In July, the SEC denied the Winklevoss bitcoin ETF proposal for the second time due to fears of market manipulation in bitcoin markets. After four different companies getting denied in the past few weeks, a few more have a chance in the coming week to make a huge impact no matter what the final outcome is this time around. It will be a continual knock knock on the door for an exchange traded fund that is wheeling and dealing with bitcoin directly to get approved by the SEC. The SEC exists to shade investors and consumers from the bad actors. Bitcoin may stand for good and etch its hash in stone so it remains unaltered, but for now they are going to keep shining the spotlight on the newer industry and make a decision when they have all of the information they want to have.
The highest hopes out of all of them to date in the CBOE VanEck SolidX bitcoin etf. The ProShares ETF is focused on bitcoin futures contracts – not bitcoin itself. Bitcoin futures contracts have regulated, well-established marketplaces that have been highly active since launching in December 2017. But the CBOE one is different than all the other crypto-related exchange traded funds out there and thus why the community has the most ‘hopium' for it to get approved as the first-ever SEC-green lighted bitcoin etf.
CNBC agrees, according to a recent writeup:
“One reason the ProShares ETF might be more appealing to regulators is because it's based on futures trading. The agency has cited the lack of regulation in bitcoin exchanges. But bitcoin futures trade on the SEC-regulated CBOE.”
Ultimately, it’s certainly possible that the latest ProShares bitcoin ETF denial will lead to more valuable insight into the exact reasons and rules they are looking for to ultimately say yes. However, it seems more likely that the SEC will delay the decision on the ETF until a later date – or even deny it entirely. Stay tuned. It could be an interesting week for bitcoin – or a total non-event.