The focus on a Bitcoin ETF has shifted from its possibility thereof to the timing of an imminent approval. With several predictions from different quarters already, recent statements are suggesting 2019 to be a more realistic date of approval. One of the most pertinent questions…
The focus on a Bitcoin ETF has shifted from its possibility thereof to the timing of an imminent approval. With several predictions from different quarters already, recent statements are suggesting 2019 to be a more realistic date of approval.
One of the most pertinent questions surrounding Bitcoin today revolves around the anticipated ETF approval by the US Securities and Exchange Commission. While most participants now see a Bitcoin ETF approval to be imminent, it is the actual timing that majority are currently concerned about.
Simply put, an ETF is any fund (mutual, hedge, whatever)that is traded on a listed exchange. ETFs are mostly trading SEC or CFTC regulated assets and as at the time of writing, many or most cryptos are not recognized as any of these. So a fund trading them would have to register its shareholders’ interests in the fund as securities while the traded assets remain unregulated.
It is the unregulated nature of these digital assets that are considered to majorly influence the reticence of the SEC to allow its approval.
Historically, a number of applications have been submitted to SEC seeking approval of such funds. Popular among these applications are the two submissions by the Winklevoss twins, both of which have been denied in March 2017 and July 2018 respectively. This has not deterred other submissions from appearing on SEC’s table, albeit with revised and supposedly improved details.
In the US Equity Research document of August 05 2018, Michael Graham CFA and Scott Suh note that the arrival of a potential bitcoin ETF remains top of mind for institutional investors seeking exposure to this emerging asset class, singling out the proposal by VanEck/SolidX as the most notable among several pending applications.
Even though most key players within the ecosystem do not see an ETF as an absolutely necessary factor towards the development of Bitcoin, most are in agreement that it would have a significant short-term effect whenever it happens. Some have even predicted an ETF to be the catalyst that the market is waiting for before it next phase of another bullish run.
In the research document mentioned above, the authors acknowledged how the last several weeks have brought heightened interest in the potential approval of a bitcoin ETF. However, the most recent rejection by SEC of the second proposal by the Winklevoss twins is seen to have dampened expectations. In their opinion, this makes an ETF approval in 2018 highly unlikely.
However, considering the details of the VanEck/SolidX ETF proposal for which SEC has set a review date of September, the duo expects another shift in the deadline, hence suggesting a more realistic ETF approval date to be sometime in 2019.
While the speculation continues, investors and market makers appear to be sitting on their hands as several predictions keep appearing as to the next destination of bitcoin.
In the end, the buck stops at SEC’s table while the market remains in critical anticipation.
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Last modified: January 24, 2020 11:01 PM UTC