As the line for Bitcoin ETF was getting longer , SEC came out with a surprise decision rejecting nearly all major bitcoin ETF applications to the likes of ProShares, Direxion and GraniteShares , much ahead of reported deadlines arising from the SEC’s public-facing approval process which includes a 45 day window and a space for deferment of up 210 days.
Notably, there was no word on the SolidX VanEck ETF application. Another thing to note that is the Bitcoin price is seen a dip of only 3 percent, indicating the street was expecting a rejection of Deferment.
Rejection sights the same reasons
The SEC has sighted the same reasons for all the three rejection. Even the issues sighted are very much similar to the previous rejections
The statement says,
“This order disapproves the proposed rule change. Although the Commission is disapproving this proposed rule change, the Commission emphasizes that its disapproval does not rest on an evaluation of whether bitcoin or blockchain technology more generally, has utility or value as an innovation or an investment.”
It further states that,
“Rather, the Commission is disapproving this proposed rule change because, as discussed below, the Exchange has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6, in particular, the requirement that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”
The statement continues,
“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, as explained below, 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 to satisfy the statutory requirement that the Exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”
GraniteShares ETF Rejection by on Scribd
BTC doesn’t tumble this time
Its been some hours since the news came out, but the bitcoin price haven yet breached USD 6300. Although there is a sentimental dampness there is no accelerated selling like the one seen when the Winklevoss ETF application was rejected. At the time of reporting BTC was trading at $6,451.27 down 3.6% recovering from the knee-jerk selling when the news hit the market. This shows that the street was pretty much expecting this rejection of further deferments to come in.
The only last application now that will be viewed is SolidX ETF application. If this too sees a “NO” by SEC, the approval would definitely be in Q1 2019 as anticipated by many analysts.
Ali Hassan, the co-founder and the CEO of Crescent Crypto, predicts it will happen in the next 18 months.
“We do think that a product is coming soon,” he told CNBC earlier this month. “Perhaps, in the next 18 months, we’ll see a Bitcoin-only ETF.”
Hany Rashwan, a chief executive officer of crypto startup Amun Technologies Ltd., said the same couple of weeks back
“The SEC is likely to delay until February of 2019 and the chances of a Bitcoin ETF approval in 2018 have always been low,”
Last Month Mati Greenspan, Analyst at EToro had also voiced the same opinion on VanEck ETF application by saying that,
“the SEC was in no rush to approve the ETF and he believes that most likely they’re going to take their time and then which would mean that on August 10th will be a simple delay of the of judgment. I believe that by the time we get to by the time we get to Q1 of 2019 the market will be much more mature as we discussed previously there’s a lot of OTC desks that are coming online”
With the way, things are turning out Q1 2019 is the landmark which one can see ETF happening. By then the ICE Bakkt venture would also be rolled out providing a federally regulated ecosystem for cryptos much in lines to what SEC wants
Will SEC clear the BTC ETF proposal in September or in Q1 2019? Do let us know what you think.
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.