SEC Delays All Bitcoin ETFs So Far But CBOE VanEck Solidx Decision Gains Momentum
The U.S. Securities and Exchange Commission (SEC) ) has added to their bitcoin ETF graveyard collection again by denying 9 more after a staff majority action voted to reject all of ProShares, Direxion and GraniteShares proposals. But this denial offers more insight and likely speculation as to this is not only a matter of if but when – the first SEC approved Bitcoin ETF does happen – it could send the markets into a frenzy as a source of legitimacy and ‘real-world' structure to a new digital asset class; cryptocurrency – and really, bitcoin first and foremost. But as always interesting crypto news would have it, many are high on hopium for the VanEck SolidX Bitcoin Trust ETF approval on or likely before September 30, 2018 as it offers a slight degree of difference that might have better odds at influencing market authorities and regulators.
The Wait Begins Again
In an order published on August 7, officials at the agency wrote that they were giving themselves more time to deliberate on whether to approve what would be the first exchange-traded product of its kind in the U.S. It's also perhaps expected given that in the past, SEC officials have used the agency's statutory powers to push back decisions on bitcoin ETFs.
The official announcement says:
“Accordingly, the Commission … designates September 30, 2018, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.”
The SEC has the regulatory freedom to push back the decision on the CBOE-backed Bitcoin ETF in early March 2019, in which now many experts are expecting or throwing out even more predictions (crypto industry has no shortage of this) that SEC will finally say yes come Q1 of next year. Given the latest notice, it seems this is where we are headed. That’s not the first time the SEC used its statutory power to delay Bitcoin ETFs. In late July, the Commission postponed the decision on the Direxion Investments filing for September 2018 but as we saw yesterday they already got denied.
Changes Since Last Rejection
There have been major changes since the SEC decided to reject the proposed rule change for Solidx Bitcoin Trust in March last year – fast forward til now – as we just saw in the ProShares and collective bunch of 9 total bitcoin ETFs getting denied, there stands to be much more dialogue and insightful context to dig into and pull strings out for both sides.
The most prominent change is that multiple derivatives markets now exist for bitcoin. The presentation lists as examples CME bitcoin futures, Cboe bitcoin futures, Ledgerx bitcoin swaps and options contracts, and Cantor Exchange self-certified bitcoin swaps contract. The first two have a combined daily trading volume of “approximately $150 – $200 million,” the presentation details, reiterating that they are all regulated by the U.S. Commodity Futures Trading Commission (CFTC).
Additionally, the product pricing has changed as the proposed trust will use OTC index for pricing and NAV. Citing that the
“CFTC has jurisdiction over OTC bitcoin trading, the presentation emphasizes: Potential manipulative activity would be identified immediately, providing the ‘necessary deterrent to manipulation’ described in the March 2017 disapproval notice.”
Bitcoin is attempting to create uncontrolled, unchanged ‘money' from day one. Its origin was good enough yet adaptable enough to be flexible with the growing demands and technological landscape. The security of digital money was never ‘real' until Bitcoin came along and said here it is, if we all agree, we all pay to play the right way. It has incentive to make it work for the people over evolving time even with necessary added on going development and layers. As for the SEC's latest crypto-based exchange traded fund rejections, now it seems the sophisticated governing bodies of the financial markets and global economy are starting to take this newer, secure internet-based money known is Bitcoin, a lot more serious. It is the leading crypto-currency for a reason and as it continues to knock on the SEC's door to introduce itself in many different ways and forms, the future has to look bright for bitcoin because of its basic building blocks and security structure. The neutral nature of “Bitcoin vs SEC” will be challenged, and ideally both ‘work' together in reasonable fashion towards greater economic purpose and trading capacity optimization on a world-wide scale, but one thing can count on is Bitcoin ETF approval will happen, even if its longer than most hopeful crypto enthuasiasts would like to see.
Added Pressure On SEC
The SEC has received an influx of comments on behalf of cryptocurrency enthusiasts on the matter, where the overwhelming majority reflect an entirely positive outlook. Their notice says:
“As of August 6, 2018, the Commission has received more than 1,300 comments on the proposed rule change.”
CBOE-backed VanEck/SolidX Bitcoin ETF proposal was filed in June when the prominent companies joined forces.