Why SEC's Decision to Extend the Deadline For First-Ever Bitcoin ETF Approval is a GOOD Thing
Take a deep breathe for all of those who sold in the past 24 hours due to this ‘soft' news. The age old adage “gone but never forgotten” could be used here in the same light as “delayed not denied” regarding the latest news about CBOE VanEck SolidX's Bitcoin ETF proposal being postponed until September 30, 2018.
Despite swirling rumors of possible SEC insider trading or a current SEC Commission Hester Peirce expressing our outspoken dissent about the Winklevoss Bitcoin ETF appeal denial, let's cover why this is GOOD (maybe not great but still GOOD) news for the cryptocurrency community and industry at large.
First, here is some really keen insight from an industry expert who had this to say:
“I run an ETF company. Everything about this is unorthodox. First of all if they wanted to kill it they would have. If they wanted to go through the motions they could have given it the typical 75 day delay which is their right. This on the other hand is a small’ish delay. Don’t throw in the towel. When we got our first ETF approved it took nearly two years and every single delay was for the full 75!days. I’ll be on Bloomberg tomorrow speaking about this with Eric Balchunas.”
Now, lets cover why else this decision was good news and will surely spark the greatest bull run in Bitcoin's near 10 year history.
Bitcoin's ETF Application Delayed by the SEC – Here's why it's Good News
While the cryptocurrency world has been in a constant state of buzz over the prospect of Bitcoin entering the ETF family, pending the consideration of a number of various applications by the Securities and Exchange Commission.
But while the community has been optimistically a-buzz about that, with rumor now circulating that the SEC wants to delay any definitive ruling on the respective Bitcoin ETF proposals of VanEck, CBOE and SolidX, there are those that look on it as a bad sign.
And who can blame them? Since the announcement, the cryptocurrency market, along with the underlying values of major coins and alt-coins has depreciated, falling to a total market cap of $232 Billion in less than 24 hours.
Over this same span of time, Bitcoin has depreciated in value by roughly 6.15%, currently trading around $6,555. Meanwhile, Ethereum has slid back in terms of value by a further 8.2%, falling below one of its major $400 supports to trade at $363.7 so far. At the same time, smaller coins such as Ripple (XRP), has receded in value harshly, falling by 13.77% overall and trading at $0.3484.
Is it unfortunate that it happened? Yes, did it essentially have to happen? No. It wasn't any surprise that the decision by the SEC was going to be postponed, the heated exchanges between major heads of the sector were evidence enough. It was also something that was predicted by a number of well-known cryptocurrency experts.
“There’s a lot of speculation on the new ETF decision, [but] I don’t think it’ll get approved in the next 30 days or so. There’s a lot of people excited about that.”
Pampliano is certainly not the only one that saw a postponement on the cards for any kind of Bitcoin ETF, and many crypto enthusiasts had pointed out the fact that the SEC has it within its right to implement anything up to a 45 day postponing period to any proposal if additional deliberation was required.
Ran NeuNer, who is CNBC ‘s Cryptotrader host, took to Twitter to point out this fact to his followers:
As expected the SEC has exercised their right to an extension on the Van Eck ETF – new date 30 September.https://t.co/g0VpimsxJf
— Ran NeuNer (@cryptomanran) August 7, 2018
The negative speculation now surrounding the SEC's decision may have been, in some small way, justified were there no notification that they would do so, but they did. The SEC published a public notice which explains the reasoning behind why they decided to postpone any decision until 30th September:
“Section 19(b)(2) of the Act5 provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding…
The Commission is extending this 45-day time period. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change.”
So, If It's Not a Bad Thing, In What Way Is It a Good Thing?
The first thing to say to panicking investors is this, it's certainly not a bad thing because it shows one thing: The SEC is listening to the people and, more importantly, it wants to make sure that any Bitcoin ETF that does come onto the market functions well.
It goes to show that the SEC is no ivory tower, according to ETH news, the SEC has clearly taken into consideration some of the over 683 public comments made on the subject of a Bitcoin ETF.
As of right now, and according to the SEC, this number since jumped to 1,300, thanks to a statement they gave.
“The proposed rule change was published for comment in the Federal Register on July 2, 2018. As of August 6, 2018, the Commission has received more than 1,300 comments on the proposed rule change.”
The second factor is that, the delay may be a reaction on the part of the SEC, to the recent announcement that the International Exchange, according to Bakkt, will be providing a regulated exchange and a custody service from a reputable trading company. This was the reason they reject the Bats ETF by the Winklevoss. There was no firm providing the two mentioned services.
The third factor being that Hester Pierce, a Commissioner for the SEC, expressed strong public dissent on the matter being discussed, demonstrating that they're not united against bringing cryptocurrencies into the investment world. This means that the SEC will have to address Pierce's concerns with any and all Bitcoin ETF's they review.
Overall, the cryptocurrency market, and the investors that populate them, has collectively overreacted to a development from the SEC that came as absolutely no surprise to financial and cryptocurrency experts, who anticipated that there would be some delays in finally rolling out a Bitcoin ETF.
One consolation, as well, is that this increases the likelihood that an ETF will be finalized and announced for September. Make sure you read this post to understand why a source close to the internal workings of this matter is extremely confident in a ‘near certainty approval'.
And lastly – want to know why this is GOOD news: as investors, this might be your last great opportunity to BUY BITCOIN at a discount in 2018 and beyond.
So to combine all of these factors into a single consideration – the ball is in the SEC's court but they will risk quite a bit by continually denying a proper ruling (and approval of course) by not sitting down and detailing exactly what they want, expect and need to happen in order to get the first-ever SEC approval for a Bitcoin Exchange-Traded Fund.