Bitcoin exchange-traded funds (ETFs) are having a hard time clearing the bar in the U.S., where nine applications were rejected by the Securities and Exchange Commission (SEC) yesterday.
The SEC is now moving to review the decisions. Commissioner Hester Peirce tweeted: "In English: the Commission (Chairman and Commissioners) delegates some tasks to its staff. When the staff acts in such cases, it acts on behalf of the Commission. The Commission may review the staff's action, as will now happen here."
If the products are ultimately approved, then the largest cryptocurrency by market value, bitcoin, would have likely seen a substantial price increase. For now, however, HODLers will have to sit tight and wait patiently with their coins shivering in cold storage a little longer. (The next major deadline is in September when VanEck and SolidX will have their joint proposal heard, though that deadline can be extended int0 2019.)
In the meantime, though, that isn't quelling speculation about how an ETF would benefit those who hold bitcoin as an investment.
"Over the past six months, bitcoin's market cap has swung from $326 billion to $110 billion. Adding $420 billion to the market cap could put bitcoin's price range from $26,000 to $44,000," he continued.
With so much capital at risk, the SEC has been fairly clear about its stance and the regulator is right to express concern about fraud and manipulation of bitcoin markets. It is important to spend an enormous amount of effort cataloguing the potential risks from all angles before approving a bitcoin ETF.