Why Did Bitcoin Price Remain Stable After CBOE’s BTC ETF Withdrawal?
The Chicago Board Options Exchange (CBOE) withdrew the Bitcoin Exchange-Traded fund (ETF) proposal that was made to the U.S. Securities and Exchange Commission (SEC). VanEck has also agreed on withdrawing the Bitcoin ETF proposal.
The cryptocurrency market and community were expecting since a very long time for a Bitcoin ETF to be approved as soon as February 27. This was the deadline for the SEC to take a decision on whether to approve or not this proposal. Bitcoin and cryptoanalysts were expecting a strong price decline after an unfavorable decision. Nevertheless, this did not happen.
VanEck CEO, Jan van Eck explained during a conversation with CNBC that the shutdown of the U.S. government influenced their decision to withdraw the proposal. The companies were not able to continue the discussion regarding the Bitcoin ETF because of the lack of personnel.
Van Eck explained about this issue:
“We were engaged in discussions with the SEC about the bitcoin-related issues, custody, market manipulation, prices, and that had to stop. And so, instead of trying to slip through or something, we just had the application pulled and we will re-file when the SEC gets going again.”
Although there was a small price drop (less than 1% at that time), the price of the most popular digital asset remained stable at around $3,500. The cryptocurrency analyst and economist, Alex Krüger, explained in a conversation with CCN that if the market did not move after the withdrawal of the Bitcoin ETF proposal, that means that not enough investors care about his Bitcoin ETF.
Nevertheless, 2019 might not be the year for a Bitcoin ETF after all. In general, the SEC has waited for the final deadline to approve an ETF. And indeed, the SEC is not trying to approve an ETF as soon as possible.
After the government shutdown, VanEck is expected to file a new application. This will reset the application’s deadline to 240 days after the initial submission. According to Gabor Gurbacs, director at VanEck, the company is actively working with regulators and major market participants to build an appropriate market structure framework for a Bitcoin ETF.
The Bitcoin ETF filing has been temporarily withdrawn. We are actively working with regulators and major market participants to build appropriate market structure frameworks for a Bitcoin ETF and digital assets in general. Will keep you updated. pic.twitter.com/o9yiN47ZKe
— Gabor Gurbacs (@gaborgurbacs) January 23, 2019
The cryptocurrency hedge fund Bitwise has also filed an application for a new Bitcoin ETF. If the application is successful, the ETF would be approved as soon as the last quarter of the current year. Hester Peirce, a SEC commission that is very positive towards virtual currencies, commented that the approval of a Bitcoin ETF could take years.