Today, the U.S. SEC denied nine Bitcoin-based ETFs, including one proposed by ProShares, a respected institutional ETF provider.
This follows a pattern where last month the regulatory body denied the Winklevosses request and sent the crypto market into a downward spiral.
The ProShares ETF was unlikely to pass since it involved leveraged trading, a more aggressive proposal than more conservative ones, including the Van Eyck ETF that received a delay in its decision just a few weeks ago.
In its last denial, the SEC cited fraudulent activity and market manipulation as reasons for refusing the proposal. Nothing in the last month of BTC trading has changed this. So ProShares shares the same fate as the Winklevoss proposal, as well as 8 other proposals. And we are going to keep seeing refusals from the SEC whose purpose is to ensure there is reasonability, rationality, and security in any kind of ETF it approves. So far, we haven’t seen that.
The market has already acted negatively to the news. But that was to be expected. BTC investors are still waiting to see institutional money come in and provide the kind of demand that sees BTC’s price climb back above $10,000. There are just roadblocks in the way.
VanEyck and SolidX
Next month the SEC will revisit its delayed decision on the proposal from VanEyck and SolidX; which manage more than $50 billion in trading and investment assets combined. To say that another way, this is not some small company applying for a new Bitcoin investment route. These are serious investment firms looking to get cryptocurrencies in the hands of their clients, safely. And the SEC doesn’t think it can do that yet.
The beauty and the beast here is that there is no team behind BTC that can stop this. It’s decentralized and so the market will continue to act with volatility around those scheming to create it. And the world and investors will wait on the sidelines because their regulatory agency is telling them that the water is still too dangerous to swim in.
Still, investment companies are not giving up, and more ETF proposals are being broadcasted. Someone will find a way to protect their assets because virtual currencies are seeing high upticks in wallet creation and general interest. Investors that see potential value in these tokens will find a company that can offer an ETF (or a packaged, safer investment option) and so companies will race to be the first to provide it.
So when will we see an ETF? When someone can show, decisively, that they can prevent investor exposure against schemes. And that seems to be a long way off; not likely in 2018