SEC Not Approving Bitcoin ETF for Price Manipulation Fears while Stock Market & Oil in Free Fall
To date the US Securities and Exchange Commission (SEC) has rejected several Bitcoin-based exchange-traded fund (ETF) proposals, the latest one was shot down just last month with no pending proposal left for approval anymore.
The primary reason behind these rejections has been “fraudulent and manipulative” acts in the industry.
However, as we have been seeing in the past few weeks, the stock market has been experiencing its worst fall since the 2008 financial crisis. Since the weekend, oil prices have been in free fall as well.
“3x Oil ETN dumps ~52% in a day. No regulator can ever again tell me that a Bitcoin ETF may be too volatile or manipulated. Oil, the single most traded commodity, tumbled 30% as a result of a weekend decision from a small non-sovereign/intergovernmental organization (OPEC),” said Gabor Gurbacs, digital asset strategist at VanEck.
A bitcoin ETF would allow investors to invest in the digital currency without having to purchase or store it.
Earlier this year, ShapeShift CEO Erik Voorhees also called for the need for a bitcoin ETF in the light of 41% premium on Grayscale Bitcoin Trust (GBTC).
“Is it fair to say that premium is the cost the SEC has imposed on investors by coercively preventing an ETF from coming to market? Which party is being helped by them, exactly?” said Voorhees at that time.
According to Nate Geraci, host of ETF Prime, in the absence of bitcoin ETF, institutional or accredited investors can “profit from this premium at the expense of retail investors.”
In a recent conversation on CNBC, Chris Hempstead, the director of institutional business development at ETF and hedge fund provider IndexIQ said the Bitcoin ETF has a bigger chance of approval if the retail demand for the product grows.
“I doubt very heavily that it’s going to be the last straw. I think everyone will continue to listen to the feedback and the notes from the SEC, what their comments are, and they will continue to address it,” said Hempstead.
When investor and market demand will push, the SEC will have another look and have different considerations. However, he is not expecting any “significant changes” in SEC’s decisions in the near future at least.
Bitcoin enthusiast Hodl wave feels it’s good that the bitcoin ETF isn’t approved yet as there’s “code to write, infrastructure to build, and sats to stack.”
“Let the Hodler base and maturing market take us to $250k / BTC and let the boomers handle the next 10x,” said Hodl Wave.
In the light of the Wilshire Phoenix’s Bitcoin ETF rejection, SEC commissioner Hester Peirce also published a dissenting statement where she slammed the SEC for its biased treatment of the bitcoin-related products.
Hester whose term at SEC is expiring on June 5 said this conservative approach “impedes innovation in this country and threatens to drive entrepreneurs, and the opportunities they create, to other jurisdictions.”