The SEC’s second rejection of the Winkelvoss twins’ proposal has left confusion in the cryptocurrency world as to what exactly the rejection means in terms of the future of the crypto ETF. It also caused volume and value losses of $11million in the industry overnight and a 4 percent drop in the Bitcoin price.
It also led to SEC commissioner, Hester Peirce, tweeting angrily about the decision which was passed by 3 to 1, and linking the curt tweet to her public statement of dissent on the SEC website.
Apparently, bitcoin is not ripe enough, respectable enough, or regulated enough to be worthy of our markets. I dissent: https://t.co/gH5zXaKtmj
— Hester Peirce (@HesterPeirce) July 26, 2018
Is second crypto ETF rejection as bad as the first?
Is the situation as bleak as it seems? This drop which took Bitcoin down from $8300 to $7 880 was small percentage-wise when compared to the around 20% fall that followed the SEC’s first ETF rejection in March of 2017.
And the CTC said its decision to oppose the proposed rule change needed to enable the Winkelvoss ETF to be listed, was not based on whether or not blockchain technology and bitcoin had value as innovations and investments. It was instead rooted in an ongoing concern (which also played a role last time round) that both were open to fraud, market manipulation and investor protection issues. And the SEC didn’t feel the arguments put forward in the Winkelvoss application handled these sufficiently.
Other ETF Ideas Waiting In the Wings
While the Winkelvoss brothers may have lost their bid for an ETF, other players are gathering to take their own shot at the prize. Recent news has indicated that VanEck, along with SolidX, its partner for its Bitcoin ETF app, is one of those lobbying for approval of Bitcoin ETFs.
Meanwhile, both Bitwise Asset Management and Direxion have filed with the SEC. Direxion is asking for the go-ahead for its Bitcoin ETF, while Bitwise is looking for approval of its publicly offered regulated currency index ETF. The SEC has postponed its decision regarding the Direxion proposal till September, on the grounds of needing more time to consider it. The rest will have to wait and see.