What’s The Point of Bitcoin ETF: We Take A Look…
There are a lot of talks surrounding Bitcoin ETF in the cryptocurrency space. Many people hoping an ETF approval could boost the prices and some saying that this will help the adoption process massively.
ETF’s, in theory, is a kind of investment fund that is tied to the price of an asset like an index, bonds or commodity. For Bitcoin ETF, this asset will be Bitcoin and if it’s get listed on a regulated exchange, authorities say that it could pave the way for large mainstream adoption.
Currently, VanEck and Solid X have a joint application and that’s why they are going to achieve. Despite SEC rejected the pair separately before, but they are still hopeful of getting the result they wanted.
SEC Is In No Rush
It’s safe to say that SEC currently taking their time before making an answer. Due to fears of manipulations and lack of regulations, the regulatory body currently unwilling to approve these proposals and therefore they are in no rush to make the things official.
The Commission is instituting proceedings to allow for additional analysis of the proposed rule change’s consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’ and ‘to protect investors and the public interest.
When We Will See An ETF Accepted?
Due to its own rules, SEC now has time to decide until February 2019. The company confirmed that they received more than a thousand letters for Bitcoin ETF’s, they are very clear about not rushing the entire process. The company also rejected nine separate ETF’s back in August but VanEck and SolidX’s ETF approval seems more serious than the others.
SEC also has some concerns in the inadequate size of the Bitcoin ETF market as they wrote earlier:
“Among other things, the Exchange has offered no record evidence to demonstrate that Bitcoin futures markets are ‘markets of significant size.’ That failure is critical because […] the Exchange has failed to establish that other means to prevent fraudulent and manipulative acts and practices will be sufficient, and therefore surveillance-sharing with a regulated market of significant size related to Bitcoin is necessary.”
The SEC has also stressed that its decisions did not rest “on an evaluation of whether Bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment.”
What Will Change Their Current Statement?
Many hoping good and decent regulations and the adoption of the technology could force SEC to reconsider their decision. Also, considering how the fraudulent market is at the moment, the leading people need to find a way to eliminate these scammers in order to get the ETF decision.
Similarly, crypto analyst Brian Kelly noted back in August that Bitcoin ETF has more chance to be approved by next year as Kelly predicts the market will be much more ready considering the situation in today. Kelly said:
“Here’s CME Futures open interest of large holders. [As of] April, you’re starting to see a big increase […] about an 85 percent growth rate. If you extrapolate that out, by February 2019, you’re going to have a very robust market here.