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The odds that a Bitcoin Exchange Traded Fund (ETF) is approved this year are disappearing.
Securities and Exchange Commissioner Hester Peirce once again downplayed the prospect of a Bitcoin ETF on Tuesday. Known as "Crypto Mom" for its unwavering support for Bitcoin, she blamed the "Securities and Exchange Commission (SEC)" for "the dark rules" for this long delay.
Speaking at an event at the Bipartisan Policy Center, she said:
"[W]We have applications. … These are subject to a very specific time frame where we have to act within a certain time frame, and that's what we depend on. And these are very obscure rules as to whether this happens or not, so I can not speculate on the timing. "
Crypto Mom: Fight the good fight
Crypto Mom Hester Peirce is a single bitcoin champion at the SEC. As CCN has previously pointed out, it is the progressive voice in a traditionally conservative institution:
"You all know that I'm working to try to convince my colleagues to be a little more open minded when it comes to [crypto]. "
She strongly insisted on a vote on the highly controversial proposal of VanEck and SolidX last year, but the decision was finally delayed. As Peirce deplored, the SEC is "impulsive to flee" from Bitcoin.
In English: the Commission (President and Commissioners) delegates tasks to its staff. When staff act in such a case, they act on behalf of the Commission. The Commission can review staff action, as will happen here.
– Hester Peirce (@HesterPeirce) August 23, 2018
Bitcoin ETF: the catalyst for the next crypto-bull race?
The approval of a Bitcoin ETF is widely regarded as the next major trigger for a price rebound. The ETF would offer institutional investors a simple way to familiarize themselves with the cryptography market.
The SEC has rejected several ETF applications until 2018, including a proposal by the Winklevoss Twins. The Commission has repeatedly raised concerns about the manipulation and lack of maturity of the market.
Peirce fought back, suggesting that investors are able to form their own opinion on the risks of bitcoin.
I look forward to working with you @SECJackson to open the doors to innovation, but we are not a merit regulator that issues seals of approval, so encourage investors to do their own work to decide if an investment suits them: https: / /t.co/iMA7NUkLRp
– Hester Peirce (@HesterPeirce) February 7, 2019
The best hope for approval currently lies in a proposal from VanEck and SolidX. It gets its price from bitcoin over the counter (OTC), rather than futures markets. OTC markets are much larger and more liquid, giving the application a better chance of being approved.
The VanEck Solid X ETF is also "physically settled", which would require the actual purchase of bitcoins to support the ETF.
Unfortunately, the CBOE withdrew the application in January because of the closure of the government. The team has again submitted the application and will embark on the long road that leads to approval or rejection.
What does it take to get a Bitcoin ETF approval?
The SEC's main concern is the manipulation, theft and safekeeping of cryptographic badets. SEC Chair Jay Clayton gave an overview of his concerns at the November consensus meeting.
"What investors expect is that commodity trading that underlies the ETF makes sense and does not pose a risk of manipulation. It's a problem that needs to be addressed before I feel comfortable. "
Despite this, VanEck's director, Jan van Eck, is confident. He says VanEck has "very good answers to [SEC questions]but we must simply demonstrate it very, very clearly and convincingly to the regulators. "
SEC commission, Jay Clayton is not yet convinced by crypto. Source: The hill
Anyway, the battle through the arcane system will be a long process. The VanEck application has just been submitted again and the SEC may take 180 days to be approved or refused. In addition, they can extend the duration to 60 days.
Bitcoin ETF is "virtually certain"
The SEC may well continue its momentum, but an ETF will eventually be approved. As one Wall Street advisor explained this week:
"It's almost certain. The only question is when. And I do not know how long it will happen; The SEC has many legitimate legitimate concerns that the industry must overcome, and I am convinced, and we will see an ETF in bitcoins someday. And it is at this stage that I will feel much more comfortable with recommending the participation of ordinary investors. "
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