- Craig Wright: Copyright Registration Proves I’m Bitcoin's Satoshi; Copyright Office: Nope!
- Ethereum Price Technical Analysis (May 23): Correction to Support Level Is Expected
- SEC Ends a $30M Cryptocurrency Ponzi Scheme Supposedly Backed by Diamonds
- The Ethereum Foundation Allocates $30 Million for Mainnet Development
- Commentary: Rapper TI Sold Unregistered Securities in the Form of FLiK Tokens
After the SEC had rejected the application of the Winklevoss twins of a Bitcoin exchange-traded fund (ETF) on July 26, cryptocurrencies – and particularly Bitcoin – had maintained a relatively stable price range. When the SEC recently decided to delay its decision regarding a different Bitcoin ETF, however, the crypto markets did not remain similarly restrained and plummeted sharply.
On August 7, the SEC released an official notice, informing that the decision whether or not to allow listing and trading shares of SolidX Bitcoin Shares issued by the VanEck SolidX Bitcoin Trust has been postponed until September 30. Although the SEC does not provide a clear explanation as to why and only asserts it “finds that it is appropriate to designate a longer period within which to take action,” there might be a subtle hint for that in the official document.
The proposed rule change was published for comment in the Federal Register on July 2, 2018. As of August 6, 2018, the Commission has received more than 1,300 comments on the proposed rule change.
So perhaps the SEC truly wishes to peruse the user-generated remarks before making a final decision about the ETF, which isn’t necessarily bad for crypto – a brief review of these comments will divulge that they are overwhelmingly in favor of approving the ETF. In fact, it is incredibly difficult to find just a single comment that petitions for a rejection.
Whatever the reason may be, crypto investors did not take well the news of the delay, and almost immediately after the notice has become public, cryptocurrency prices have begun to tumble. Take a look at the following Bitcoin (BTC) price chart, and observe the steep decline (marked with a red arrow) following the SEC announcement:
And here’s Ethereum (ETH) price chart, equivalently exhibiting the same downward trending subsequent to the SEC notice:
Why, then, do Bitcoin ETFs play such a crucial role in the crypto market? These ETFs are perceived as a sort of gateway of cryptocurrencies into the traditional financial world, where conventional investors – who might hesitate getting into the foreign world of crypto – could have easy access to digital currencies through familiar financial commodities in their own home ground.
Bitcoin ETFs could potentially open up that option, which in turn could stir a turbulence in the old world of finance; the SEC seems to realize it, and thus it moves forward very slowly (perhaps too slowly).