SEC’s Pending Bitcoin ETF Approval Could Be Crypto Deja Vu All Over Again
Crypto ‘Deja Vu’ Risks Jeopardize Bitcoin's ETF Approval With the SEC
The most important virtual currency in the market has shot up about 40 percent to more than $8,000 on July the 24th. This price surge may be related to the decision that the SEC can make about the bitcoin exchange-traded fund (ETF) that is now being reviewed.
However, cryptocurrency lovers can become their own worst enemy when it comes to a quoted fund backed by Bitcoin (BTC).
Volatility Among The SEC's Top Concerns
The valuation, and the potential volatility, were one of the main concerns that the SEC expressed in a January’s letter about the outlook for these funds after seeing the currency rise above $18,000.
The regulator asked potential issuers to withdraw their applications until they could answer its questions. However, rumors that a Bitcoin ETF could be close to causing price swings, pushing the currency above $8,000 for the first time in two months.
“The SEC doesn’t want any part of adding to or influencing some speculative bubble,” Eric Balchunas, a senior ETF analyst with Bloomberg Intelligence, said of Bitcoin’s recent rally. “It’s like DEJA VU, but I’m 10 times more pessimistic” about a fund being approved.
Crypto Fans Analyze SEC Playings And Expect Decision To Be Made In August
The latest speculative attack appears to stem from Cboe Global Markets Inc.'s request presented on June the 20th to the SEC for permission to list a Bitcoin ETF created by VanEck Associates Corp. and SolidX Partners Inc.
Since then, the regulator has received an avalanche of lobbying messages from the fund, with cryptocurrency fans analyzing SEC rules to predict a decision in various ways for “August 10, August 15, August 16 or September”.
The ETF sector is increasing the pressure in the market. Last week, VanEck responded to the SEC's questions starting in January, stating that its fund would be consistent with the commission's mission to protect investors.
Bitwise Asset Management, which already manages a private indexed crypto fund, said on July the 24th it is seeking approval for a new ETF that would track the performance of the top 10 virtual currencies.
For now, at least three other requests for exchanges to include Bitcoin ETFs have been pending since January. The SEC said in June it would need until August the 23rd and September the 15th to consider two rule changes referring to the Bitcoin backgrounds of ProShares and GraniteShares respectively.
During the last week the agency also said it would need until September the 21st to evaluate another change for several Direxion branded ETFs.
As such, so far this year, the SEC has expanded its considerations on several occasions.