Bitcoin Exchange Traded Funds (ETFs) have been one of the most controversial topics of debate in the cryptocurrency community of late. While there has been an active push from several major names in the community towards introducing Bitcoin ETFs, the regulatory authority, Securities and Exchange Commission (SEC) has put this idea on a break for a while. The latest announcement from the SEC indicates that their decision on Bitcoin ETFs would be announced in 2019.
The SEC is to announce their decision on a proposal sent in by the Chicago Board Options Exchange (CBOE). The decision would be to either approve or reject the listing and trading of a Bitcoin ETF issued by the VanEck SolidX Bitcoin Trust. This is an important decision - as approving this may lead to a number of other interested firms also coming out with their Bitcoin ETF listings.
This proposal was first filed by the CBOE back in June 2018. The SEC stated on the 7th of August that they are going to announce their decision in September. In September, however, the SEC stated that that a decision would come towards the end of the year - and earlier this week, the SEC has announced that they would announce their decision with regards to Bitcoin ETFs on the 27th of February, 2019.
Reports point out that members from VanECK and SolidX met representatives of the SEC in November. In this meeting, the members of the two firms tried to put their case forward that the markets have matured enough to introduce Bitcoin ETFs. However, this meeting came amid serious market turmoil - and a time when the cryptocurrency markets were tumbling down in terms of market capitalization. Mid-November onwards, the markets have been highly unstable - with periods of short gains followed by significant drops in cryptocurrency prices.
In their meeting with the SEC representatives, the two firms put forward a presentation which stressed on the following three aspects of cryptocurrency markets:
1) Those who wish to manipulate the bitcoin market must have funds spread across multiple trading platforms
2) The global price of bitcoin would have to be manipulated in order for it to be changed on a specific platform
3) "The homogeneity of bitcoin makes for a uniform worldwide market rather than regional semi-independent markets that result in non-fungibility and market fragmentation."
The companies tried to prove that while Bitcoin can be manipulated, it is at no more risk than any other commodity in the markets. This presentation came in the light of SEC Chairman Jay Clayton’s statement where he had said that he would only be comfortable in approving Bitcoin ETFs when the cryptocurrency markets would be safe from price manipulation.
Over ten such proposals asking for Bitcoin ETFs to be listed and traded on exchanges have been rejected by the SEC - this includes one by Tyler and Cameron Winklevoss - the owners of the Gemini cryptocurrency exchange - among the biggest and the most influential names in the world of cryptocurrencies.
It would be interesting to see if the SEC does approve the petition in February 2019 - or will it face another delay? Stay tuned with us at Cryptoground to find out!
