Crypto Roundup: SEC Officials Butt Heads On Winklevoss ETF; Bitcoin’s “Second Wave Rally” Is Upon Us

Calls for the SEC to approve its first bitcoin exchange-traded fund are growing louder by the day. This time, a high-ranking member from within the agency’s own ranks is making the strongest case for why regulatory approval is needed.

Meanwhile, some of bitcoin’s most ardent supporters explain why prices are are about to go through the roof.

Bitcoin’s “Second Wave Rally”

Bitcoin and other cryptocurrencies are experiencing a “second wave rally” driven by stronger institutional demand and business adoption, according to CEO of Fatfish Internet Group, a global technology venture capital firm.

In a Sunday interview with CNBC, Kin-Wai Lau said institutional investors are the main driving force behind bitcoin’s latest price reversal – a trend that will continue as mainstream adoption grows.

“I think we are experiencing typically what people will think of as a second wave rally for bitcoin and cryptocurrencies,” Lau said. “It’s a very strong wave. It’s driven by institutional demand. It’s driven by adoption. Lots of interest this time around — trading volume is several times higher than during the lows.”

Cryptocurrency trading volumes appeared to have doubled over the weekend after Exx, a Chinese digital currency exchange, artificially inflated its Ethereum turnover.

That said, overall activity has recovered sharply from last month’s bear-market low, with bitcoin averaging more than $4 billion in daily trades over the past seven days.

SEC Official Opposes Ruling on Winklevoss ETF

Underpinning Lau’s bullish outlook is a substantial shift in regulatory thinking on bitcoin and other cryptocurrencies. Not only has the U.S. Securities and Exchange Commission (SEC) deemed bitcoin to be a non-security, members of its own ranks are disputing the agency’s decision to reject a second application for a crypto ETF by Cameron and Tyler Winklevoss.

Last week, SEC Commissioner Hester Peirce formally objected to the SEC’s ruling on the Winklevoss ETF on grounds that it undermines innovation in the sector.

“I respectfully dissent from the Commission’s order disapproving a proposed rule change, as amended, to list and trade shares of the Winklevoss Bitcoin Trust on Bats BZX Exchange, Inc. (“BZX”),” Peirce wrote in a public statement.

“I am concerned that the Commission’s approach undermines investor protection by precluding greater institutionalization of the bitcoin market. More institutional participation would ameliorate many of the Commission’s concerns with the bitcoin market that underlie its disapproval order. More generally, the Commission’s interpretation and application of the statutory standard sends a strong signal that innovation is unwelcome in our markets, a signal that may have effects far beyond the fate of bitcoin ETPs.”

Thank the Network Effect for $500,000 Bitcoin

Hedge fund manager Mark Yusko is doubling down on his bet that the bitcoin price will reach $500,000 in six years. In his view, it’s all about the network effect.

Yusko, the founder of the North Carolina-based Morgan Creek Capital Management, says bi1tcoin’s network effect will lead prices on an exponential growth curve for the foreseeable future. This includes consecutive record highs through 2024.

In principle, the network effect describes the phenomenon wherein an increased number of users improve the value of a good or service. For example, the internet had very little value when it was accessible only to a few people. Likewise, its utility rose as more people gained access to it.

HTC Blockchain Phone to Accept Litecoin

HTC Corporation confirmed Monday that Litecoin co-founder Charlie Lee will serve as an adviser to HTC Exodus, a blockchain smartphone dedicated to decentralized applications. Lee has also confirmed that the new phone will support Litecoin in addition to bitcoin, Ethereum and Dfinity, among others.

The company plans to begin distributing the new phone by the end of the year, though no firm date has been provided.

HTC is not the only company working to bring a blockchain smartphone to market. At the beginning of the year, Sirin Labs raised $157 million via initial coin offering (ICO) to build an Android-based smart contract with dapp, cold storage and token conversion capabilities.

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.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi