The SEC will be faced with a few applications in a couple of months to come. Considering the past submissions all bitcoin-related fund applications by ProShares, Direxion and GraniteShares and physical ETF of VanEck/SolidX bitcoin ETF would all await their fate to be decided.
The deadline for a decision on two funds from ProShares is August 23, is just over two weeks away. The rule change paving the way for those products was submitted by NYSE Arca on December 4, 2017.
September will see a series of deadlines for bitcoin ETF, starting on September 15, the date by which two funds by GraniteShares will receive a thumbs-up or thumbs-down. The funds were initially proposed on January 5.
The deadline for Direxion’s four funds is September 21, as indicated by public records, after being first submitted on January 4 while the SolidX-VanEck proposal is expected to appear in front of the commission on September 30.
As the rulebook allows SEC the liberty to use timelines effectively- with an initial decision due in 45 days from the day the application gets published in the U.S. Federal Register. Further to this it also has right to differ the same to as many as 240 days following publication in the Register.
With nearly all the queries finding an answer, the SEC’s demands of security of assets, price manipulation of underlying assets and bitcoin being traded on federally managed exchanges. All these answers are seeming to be answered by Intercontinental Exchange (ICE)—the trading goliath that owns the New York Stock Exchange and other global marketplaces is planning to the federally regulated ecosystem for Bitcoin. ICE’s new venture.
Although everything is in place Bryan Courchesne, the managing director of Digital Asset Investment Management still feels BTC ETF may not be approved. He was quoted saying by certain media that
“I think the ETF does not get approved. One of the reason’s the Winklevoss ETF was denied was because of the SEC’s concern over manipulation in the underlying market. Nothing has changed in the space to curtail that and it is tough to prove that bitcoin markets are resistant to manipulation.”
On the potential market reaction to an ETF denial, Courchesne suggests a selloff is inevitable, but that it would be relatively short-lived.
“It’s hard to think anything but a selloff would happen if denied. I don’t think it will take the space long to move on from the event and find new optimism and adoption.”
Also according to cryptocurrency researcher and security expert Andreas Antonopoulos, Bitcoin ETF may open doors to institutional investors but will also give them the platform to manipulate prices
“Everybody is so excited about ETFs. What we have seen in other markets is that when an ETF becomes available, the price really increases dramatically, as suddenly that commodity becomes available to a lot more investors and these investors pile on. But, the other side of it is that there are always these claims that the commodities markets are heavily manipulated and opening up these ETFs only increase the ability of institutional investors to manipulate the prices of commodities.”
With SEC yet to make a decision, the ETF really hangs in a cliff-hanger and with it also arise questions which the community needs to ask itself- Is the Bitcoin ETF really necessary for cryptocurrencies? Do let us know your views on the same.