How does the Bitcoin Cash (BCH) Hash War Influence Bitcoin ETF’s Future Approval?
One of the biggest topics of discussion in the crypto world of 2018 is the possibility of Bitcoin ETF approval by the US SEC. Many believed that it is only a matter of time before the SEC will decide to approve an ETF application, and allow Bitcoin to enter a new “golden age”. However, after BCH Hash War began with November 15th hard fork, many became anxious to see how will the incident reflect on the SEC's decision.
The SEC Is Reviewing 9 BTC ETF Applications
Bitcoin ETFs have been around for a while, with the first applications being submitted for review as far back as in 2013. However, in the last two years, more and more entities became interested in them, and the SEC received a lot more approval requests.
There are so many of them, that in August 2018 alone, the SEC announced that it will reject 9 of them. However, while all of them were rejected on that occasion, the SEC recently announced that it is currently reviewing them after all. Their announcement also marked November 5th as the last chance for any interested party to submit any statement that would support or oppose the proposals.
The proposals were issued by three companies, with 5 of them coming from Direxion, 2 of them from ProShares, and the last 2 from GraniteShares.
Other Bitcoin ETF Applications
Apart from the previously discusses 9 ETFs, there were numerous others submitted by other firms. The one that received the most attention was filed by three firms that decided to join forces for this cause. Those include CBOE Exchange, SolidX, and VanEck.
Many believe that this is the one that has the best chance at actually getting approved. Unfortunately, the date of the SEC's decision was postponed several times already. According to the last update by the Commission, the decision will arrive by December 29th, 2018.
However, due to the current high volatility within the crypto market, many believe that the SEC will use these events as an opportunity to postpone the decision again.
How Does The BCH Hash War Influence This Decision?
In order to understand how can the Hash War truly influence SEC's decision, it is important to note how the SEC website describes the Commission's goal. Their mission is to protect investors, facilitate capital formation, and maintain fair, efficient, and orderly markets. Markets need to be regulated and protected even more now, due to the fact that more and more new investors are trying to use them for making a profit that will secure their families and provide them with financial security.
On the other hand, there is the current situation, where hash power meant to be used for Bitcoin is being redirected towards BCH. Even before the hash war actually started, Bitcoin (and the rest of the crypto market) started losing value rapidly. Its price dropped to $5,500 for the first time in months. Crypto holders were selling their coins in panic, and the prices kept going down.
As a result, the SEC got proof of how unstable and volatile the market still is. As such, it seems unlikely that they will allow ETFs, as this would mean that cryptos would finally find an indirect way to enter Wall Street. While some believe that it is unlikely that the SEC will approve the ETF now, others claim that it is entirely impossible for that to happen.
On top of that, around 80% of total BTC mining is being done in China, which is a country that the SEC has no jurisdiction over. Not being able to control any part of this asset makes it that more difficult for Bitcoin ETFs to gain approval.
It should be noted that all of this is still nothing more than speculation and that the final decision is for the SEC to make. However, considering recent events in the market, it is highly unlikely that 2018 will be the year when Bitcoin ETFs will get an approval.