SEC Comes At Bitwise’s Bitcoin ETF Proposal Guns Blazing; Denied Due To Market Manipulation Fears


US Securities and Exchange Commission (SEC) has rejected the last Bitcoin exchange-traded fund (ETF) of the year and crushed the hope for a BTC ETF in 2019.

On Oct. 9, the SEC issued a 112-page order disapproving NYSE Arca’s proposed rule change to list and trade shares of the Bitwise Bitcoin ETF Trust.

The “detailed feedback,” Matt Hougan, Global Head of Research, Bitwise Asset Management said provides a “clear pathway” for ETF applicants and the company intends to refile as soon as appropriate.

SEC’s concern, Bitwise explain is about market manipulation and oversight. Although Bitwise is optimistic about how the market has matured in these past 2 years, they acknowledge that “there's more to be done.”

Analyst Rptr45 took to Twitter to share how there’s a “strong chance” Bitwise might have set the entire industry back with the publication of their study coming 95% of trading volume if wash trading.

Because the SEC stuck to that like a gum, citing it 15 times throughout its rejection order. The SEC, as commission Hester Peirce has pointed out, is “risk-averse by nature” and their default position is no.

“There's a good chance any new application must prove what Bitwise stated with their 95% study is WRONG,” said the analyst.

According to Rptr45, “there's no ETF coming anytime soon.”

All in all, SEC’s reaction to Bitcoin ETF is best stated by economist and trader Alex Kruger,

Bitwise, however, sees this as positive because “This is what progress looks like. The order adds detail & clarity to the issues that need to be overcome.”

Moreover, historically, the first-of-a-kind ETPs of bonds, gold also took multiple years.

However, this as pointed out by Jake Chervinky might mean, “Jay Clayton's SEC will never approve a bitcoin ETF.”

Clayton, who is referred to as the Crypto Dad will leave the office on June 5, 2020 — though it could go on for another 18 months.

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