Between 1942 and 1945, Americans would sit enraptured around their living room radios,
night after night, listening to news of the war.
The broadcaster would rattle off updates in vivid detail a victory here, a retreat there.
But for years, victory elluded the Allies.
In many ways, the broadcasts were repetitive — an ebb and flow of wins and losses,
with seemingly no forward-moving momentum.
But for the patient listener, the broadcasts captured the torpid pace of progress.
The Allies notched one triumph after another, and victory slowly approached.
So it is with cryptocurrency.
Week after week we report on the latest trends in adoption, both by institutional
and retail investors.
And week after week, the progress seems increasingly incremental.
Rome wasn't built in a day, as the saying goes.
Or more fittingly in our case — revolutions don't happen overnight.
So it came as no surprise to me this week when the SEC announced it had once again
rejected a series of bitcoin ETF proposals.
The announcement marked the third such rejection this summer.
Once again, the agency cited concerns about the possibility of fraud
and market manipulation.
Markets were similarly unsurprised by the latest decision — the price of bitcoin barely budged on the news.
The reality at this point is that a bitcoin ETF is starting to look like a distant possibility.
Even the most promising applicant, the VanEck Solidx ETF, is at risk of
rejection in September.
This doesn't mean that an ETF will never happen. It also doesn't mean that bitcoin is doomed for failure.
In fact, it might mean quite the opposite.
The only thing worse than a rejected bitcoin ETF is an approved bitcoin
ETF that fails to generate investor interest.
Additionally, the market's indifferent reaction to the news represents a maturing
market that has already accepted the SEC's skepticism of digital currency.
The reality is, at this point, the world is not ready for a bitcoin ETF.
However, as I speak to the savviest developers and investors in the space,
we're witnessing ongoing development with
small and subtle progress .
Here’s the great news: We are on the cusp of many great developments later this year.
In the coming months, we'll talk more about these small victories as they develop.
With any new venture, I expect to experience some setbacks along the way.
Bitcoin and cryptocurrency are no different.
The market will move forward and find other innovative ways to tap institutional capital and attract investor interest.
At the end of the day, the overall investment thesis remains the same:
Demand exists for decentralized digital money.
For now, I continue to believe in the potential of cryptocurrency and intend to accumulate bitcoin as the price dips.
Takeaway:
This week, the SEC rejected a series of bitcoin ETF proposals,
marking the third time the agency shut down such
proposals this summer.
At this point, it now appears that a bitcoin ETF is unlikely in the near term.
However, progress and innovation continue behind the scenes in the cryptocurrency space.
I maintain that in the coming months, new innovation will find ways to attract institutional capital.
I continue to remain bullish on the long-term potential of cryptocurrencies such
as bitcoin and ethereum, and advise my readers to buy the dip.
By
Nick Johnson