Bitcoin held most of Monday’s 13% surge as traders took in stride another delay by U.S. regulators to approve a Bitcoin exchange-traded fund.
The most-liquid cryptocurrency was little changed at $8,000 as of 2:12 p.m. Tuesday in New York. The token traded in its narrowest range in more than two weeks, while the Bloomberg Galaxy Crypto Index edged up by 2%.
Speculation that Cboe Global Markets Inc.’s proposal may win a green light had filtered through crypto internet sites in previous days as Bitcoin rallied to within 2.5% of its one-year intraday high of $8,594. The digital asset has more than doubled during 2019.
“A lot of questions are still out there that the staff has. I tell everyone ’Don’t hold your breath,”’ said SEC Commissioner Hester Peirce on the sidelines of a conference in New York on Tuesday. “ If I had my way, we would have already had one and maybe we would have had more.”
The SEC on Monday asked for additional comments on Cboe’s plan to list an ETF from VanEck Associates Corp. and SolidX Partners Inc. The delay does not “indicate that the Commission has reached any conclusions with respect to any of the issues involved,” the regulator said.
“The approval of an ETF would obviously be a huge thing for the crypto community,” said Dáire Ferguson, chief executive officer of Irish online currency platform AvaTrade Ltd. “There is optimism in the market due to the recent bull run, and that optimism seems to spill over the SEC delays and negate any negative views of hopeful investors. The general feeling is that progress is made every day, little by little.”
Cryptocurrencies have been a hot potato for regulators partly because of their anonymous ownership and consumer complaints of scams. In the U.K., some 1,500 reports of supposed fraud were tallied last year by the Financial Conduct Authority and Action Fraud, the national reporting center for fraud and cybercrime.
The Washington-based SEC pointedly asked respondents to comment on issues central to avoiding price manipulation and fraud, such as their views on how the ETF’s price will be determined. Promoters plan to use a “proprietary, non-public methodology that uses the privately reported bid/ask spreads of an unidentified set of U.S.-based market-makers in the OTC marketplace,” the SEC said.
“We continue the hard work towards better-regulated, safer and more liquid digital assets markets,” Gabor Gurbacs, VanEck’s director of digital strategy, tweeted after the SEC announcement. “Bitcoin is too big to ignore.”
The SEC set a 35-day period for additional comments on changing securities rules to allow VanEck SolidX Bitcoin Trust to trade.
“Investors should keep doing what they’re doing and not put too much weight in whether the SEC approves something or doesn’t approve something,” said Peirce. “Because these processes can take a very long time.”
(Adds Peirce comments in fourth and last paragraphs.)
--With assistance from Vildana Hajric.
To contact the reporter on this story: Todd White in Madrid at twhite2@bloomberg.net
To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Cecile Gutscher, Dave Liedtka
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