Bitcoin Was Rejected Again,This Is Why It Doesn’t Matter

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Bitcoin Was Rejected Again,This Is Why It Doesn’t Matter

The SEC Is On Track For A BTC ETF

The SEC has just rejected another 9 BTC ETF applications from 3 top ETF providers; Direxion, ProShares and Granite Shares. The news is not surprising as these funds, like all the ones denied before them, fail to meet the SECs standard for safe investment. The reason is simple, these ETFs are all based on the price of BTC and the SEC has little to no control over international exchange mechanics.

The news is a shock to the market but ultimately doesn’t matter. The really important decision won’t come until next month at the earliest and next year in all likelihood. The SEC is expected to rule on another BTC based ETF at the end of September and it could be a game changer. This ETF, the VanEck SolidX BTC ETF, is unlike others before it and may pass muster in the eyes of US regulators.

To date, BTC ETFs have been based on the price of BTC, the VanEck SolidX BTC ETF will be based on the price of the BTC futures listed at the CBOE. This may seem like a fine hair to split but in the eyes of regulators the BTC future is listed on a US regulated exchange where it is less susceptible to price manipulation. Physical BTC’s are traded on open exchanges around the world and highly susceptible to manipulation.

Despite this cryptocurrency analyst Brian Kelly thinks it will be early 2020 before the SEC approves a BTC ETF. He says the agency is in the process of surveying the market, looking for potential pitfalls and the means to mitigate the. In my view it may take the launch of Baakt, a cryptocurrency exchange platform project that is in the works, to facilitate the kind of stability the SEC is looking for.

Baakt is a collaborative effort between Microsoft, Starbucks and the Intercontinental Exchange. The goal is to guild a US-compliant cross-token exchange and wallet system that would tie exchanges together. What it means for traders will be better price discovery, tighter spreads and lower volatility; what it means for the SEC is a way to monitor the market and provide safe trading.

Bitcoin is now trading near $6,500 and appears to be building a base. The caveat is that prices are contained by a key downtrend line that may hold prices back over the next few weeks. The good news is that support is close to hand and the narrowing range that has dominated prices all year is coming to a point; prices will have to break out one way or the other. Based on recent action it looks as though prices are well supported so a move to the upside is more likely than not.

The Bitcoin ETF Gets Rejected, This Is Why It Doesn’t Matter

A Bitcoin ETF Is Coming Soon

The SEC has rejected a second attempt by the Winklevoss Twins to list a Bitcoin ETF based on holding of their Gemini Bitcoin exchange. The proposal is based on a rule change that would allow the commodity based fund to list. In their argument the Winklevoss claim that Bitcoin markets and Gemini are uniquely resistant to manipulation, the main concern of US regulators. The SEC says “the record does not support such a conclusion.”

The key takeaway for Bitcoin HODL’ers is that the SEC has not rejected blockchain, BTC or the possibility of a BTC ETF, just this version of a BTC ETF. The SEC says there are still issues with security, market manipulation and investor protections that need to be addressed. Proponents of this and other forms of BTC ETF argue the acceptance and listing of such a product would alleviate many of those issues.

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Meanwhile, the VanEck/SolidX application to list a BTC based ETF is still under review. The joint venture was officially proposed in a letter to the SEC early in July with a comment period currently in effect. Traders and investors alike have stepped up in favor of the listing citing many benefits to the public. Based on SEC regulations the agency has 45 days to respond to the request which means we will be getting more US related BTC news within the next 2-3 weeks.

There are also at least six other applications for BTC ETF’s in the works. The NYSE/ARCA has requested the listing of five ETF products ranging from a simple BTC tracking stock to highly leveraged positive and negative return ETFs based on the same. Most recently Bitwise, a cryptocurrency asset manager, has requested to list an ETF based on a basket of cryptocurrency. While the SEC is not expected to accept any of these requests in July, they are expected to grant the listing of BTC ETFs in the not too-distant future.

Bitcoin surged in the last week, breaking above a key down-trend line, on the hopes (at least partially) that the SEC would indeed grant requests for a BTC ETF. The Winklevoss news took steam out of the rally, sending BTC down about -2.5%. The move is bearish but did little to alter near term trends which are pointing to higher prices down the road. This week’s action has resulted in a retest of resistance-turned-support that will ultimately help the coin form a base from which it can rally.

The Bitcoin ETF Gets Rejected, This Is Why It Doesn’t Matter

A Bitcoin ETF Is Coming Soon

The SEC has rejected a second attempt by the Winklevoss Twins to list a Bitcoin ETF based on holding of their Gemini Bitcoin exchange. The proposal is based on a rule change that would allow the commodity based fund to list. In their argument the Winklevoss claim that Bitcoin markets and Gemini are uniquely resistant to manipulation, the main concern of US regulators. The SEC says “the record does not support such a conclusion.”

The key takeaway for Bitcoin HODL’ers is that the SEC has not rejected blockchain, BTC or the possibility of a BTC ETF, just this version of a BTC ETF. The SEC says there are still issues with security, market manipulation and investor protections that need to be addressed. Proponents of this and other forms of BTC ETF argue the acceptance and listing of such a product would alleviate many of those issues.

Meanwhile, the VanEck/SolidX application to list a BTC based ETF is still under review. The joint venture was officially proposed in a letter to the SEC early in July with a comment period currently in effect. Traders and investors alike have stepped up in favor of the listing citing many benefits to the public. Based on SEC regulations the agency has 45 days to respond to the request which means we will be getting more US related BTC news within the next 2-3 weeks.

There are also at least six other applications for BTC ETF’s in the works. The NYSE/ARCA has requested the listing of five ETF products ranging from a simple BTC tracking stock to highly leveraged positive and negative return ETFs based on the same. Most recently Bitwise, a cryptocurrency asset manager, has requested to list an ETF based on a basket of cryptocurrency. While the SEC is not expected to accept any of these requests in July, they are expected to grant the listing of BTC ETFs in the not too-distant future.

Bitcoin surged in the last week, breaking above a key down-trend line, on the hopes (at least partially) that the SEC would indeed grant requests for a BTC ETF. The Winklevoss news took steam out of the rally, sending BTC down about -2.5%. The move is bearish but did little to alter near term trends which are pointing to higher prices down the road. This week’s action has resulted in a retest of resistance-turned-support that will ultimately help the coin form a base from which it can rally.

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