BTC/USD Little Changed as SEC Re-Opens Review of Nine Bitcoin ETF Applications
Bitcoin’s price was little changed heading into the weekend, as volatility fell to fresh yearly lows after the U.S. Securities and Exchange Commission (SEC) set forth a timeline for reviewing nine previously rejected ETF proposals. Although the two events – bitcoin’s declining volatility and the SEC timeline – are not directly related, the review period offers the public more opportunity to present a case for approving a bitcoin ETF.
Bitcoin returned above $6,600 on Saturday, reaching a high of $6,648.20 on Bitfinex. BTC reached similar levels on Thursday before falling back toward the $6,550-$6,600 region. The digital currency is currently trading hands at $6,574, having declined 1% over the past 24 hours. At present values, bitcoin has a total market value of $114.1 billion.
Trading volumes have declined sharply over the past 48 hours. Total market turnover in BTC reached $3.3 billion on Saturday, according to CoinMarketCap. Total volume across all cryptocurrencies was $10.9 billion, based on latest available data.
The bitcoin volatility index, which tracks the cryptocurrency’s fluctuations using the standard deviation of daily open prices, has fallen to 1.8% over the last 30 days. That’s the lowest since May 1, 2017, according to bitvol.info.
Volatility could make its presence felt over the next two weeks as the current CBOE futures contract expires. CBOE’s current XBT bitcoin futures contract expires Oct. 17. As Hacked previously noted, the bitcoin price tends to fall into futures expiration, with declines usually beginning 10 days before the end of the contract.
SEC Seeks Further Comment on Rejected ETF Proposals
The SEC announced Thursday it is seeking further comment on a slew of recently rejected ETF applications. A total of nine funds proposed by ProShares, GraniteShares and Direxion will be open to deliberation following the SEC’s wholesale rejection of the proposals back in August. In particular, regulators are seeking the public’s feedback on proposed rule changes that would make a crypto-backed ETF possible.
According to the new filings, the SEC has set a final deadline of Oct. 26 for any new comments.
Market participants generally agree that it is only a matter of time before the SEC approves its first crypto-backed fund. The most promising proposal, set forth by VanEck and SolidX, is currently under review after the regulator postponed its Sept. 30 deadline on reaching a final verdict. The next deadline is now Dec. 29.
The ability to securitize bitcoin and other cryptoassets in a regulated fund could be the next major catalyst to mainstream adoption at the retail and institutional levels. However, crypto purists like Andreas Antonopoulos have warned that a crypto-backed ETF violates the principle of peer-to-peer money. This “pseudo-centralization” would put more power in the hands of custodians rather than investors themselves.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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