CBOE President Is Optimistic That A SEC Bitcoin ETF Approval Will Happen
In the last months, cryptocurrency enthusiasts have been talking about the approval of a Bitcoin ETF. During the first week of August, the U.S. Securities and Exchange Commission (SEC) decided to delay a decision on whether to approve the first Bitcoin exchange traded fund (ETF) or not.
But chris Concannon, Chicago Board Options Exchange’s (CBOE) president and chief executive officer, said that he is optimistic about the SEC approving the crypto ETF. But at the same time, he says that there are still challenges to face.
The ETF proposal was made by SolidX and VanEck in order to list it on the CBOE. The SEC has rejected other ETFs such as the one presented by Cameron and Tyler Winklevoss in the past.
The main concerns of the SEC are related to market manipulation in the cryptocurrency world. Earlier this year, the famous stablecoin Tether (USDT) has been accused of manipulating the market and help Bitcoin recover during hard drops.
The CBOE and the Chicago Mercantile Exchange (CME), started to offer bitcoin futures contracts back in December, 2017. The futures contracts are operating in regulated markets and could provide the foundation for an ETF.
Mr. Concannon explained that futures provide a more mature and responsible market, but futures-based ETF raise some questions about the correct liquidity levels. Until now, a product like this one has never been tested.
The SEC does not want to approve the crypto ETF due to the fact that there is not sufficient liquidity in the underlying futures. Some other players are trying to propose new projects, but they did not have a good reception from the market.
In addition to it, Concannon says that the first Bitcoin ETF would have a market advantage. Once the ETF is approved, capital will enter based on the precedent set by other ETFs.
During 2018, the cryptocurrency market has fallen to new lows not seen since November, 2017. The CBOE and CME bitcoin futures trading, did not increase to the levels that were expected some time ago, and the ETF has not been approved. This situation has created a very negative feeling among investors and enthusiasts, which can be seen in the current prices of the virtual currencies.