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SEC Delays Ruling on Five Bitcoin ETFs; VanEck/SolidX Proposal Under Discussion 

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The U.S. Securities and Exchange Commission (SEC) has announced it will delay its ruling on five bitcoin exchange-traded funds (ETFs) until September, fueling speculation that regulators are slowly warming to the idea of a crypto-backed fund. However, perhaps more important was the omission of the VanEck/SolidX application, which is viewed by crypto observers as having the best chance of gaining approval.

ETF Rulings Delayed

In the July 24 edition of the Federal Register, the Washington-based regulator said it will postpone any decision to approve bitcoin ETFs filed by Direxion Investments. The five ETFs, which were filed in January, include: Direxion Daily Bitcoin Bear 1X Shares, Direxion Daily Bitcoin 1.25X Bull Shares, Direxion Daily Bitcoin 1.5X Bull Shares, Direxion Daily Bitcoin 2X Bull Shares, and Direxion Daily Bitcoin 2X Bear Shares.

“The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change,” the regulator said.

According to the statement, the final decision on the proposed ETFs will come Sept. 21, 2018.

The regulator said it had only received two public comments on the proposed funds.

The Search for ‘Holy Grail’ ETFs Continues

By delaying the applications of these five ETFs, regulators may be allowing more time to consider a joint proposal by VanEck and SolidX to list a physically-backed bitcoin fund. Rumors of its approval, perhaps as early as next month, has contributed to bitcoin’s recent bull run.

VanEck issued a lengthy letter to the SEC on July 20 reiterating industry-wide support for the fund. The letter argued that bitcoin had sufficient liquidity through the futures market, adding that the derivatives contracts issued by CBOE and CME last December track closely to the bitcoin spot price. To allay concerns about manipulation, the letter stated that bticoin futures are “regulated and fall under the well-established” CFTC supervision framework, which would apply to the proposed bitcoin ETF should it be approved.

The SEC’s position on bitcoin has evolved since the first batch of crypto-backed ETFs was rejected last year. Notably, the securities regulator has deemed bitcoin and Ethereum to be non-securities for the reason they are “sufficiently decentralized.” The path to that realization was paved with a series of investor warnings, stock trading suspensions and ICO cancellations.

Securities regulators still have an axe to grind with ICOs and have made it clear that new crypto projects do not fall under the same scope as bitcoin and Ethereum.

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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Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 664 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Altcoins

Ethereum Co-Founder Assures Cryptocurrency Market is Not about to Collapse

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  • Ethereum co-founder and Consensys founder Joseph Lubin comments on current digital market conditions.
  • Ether (ETH) “has some characteristics of cryptocurrency, but it’s really a crypto fuel or a crypto commodity”, according to Joseph Lubin. 

The co-founder of Ethereum and Consensys founder Joseph Lubin, said “digital currencies are not on the edge of a collapse”. He was recently speaking in an interview with CNBC, providing some general overview on current market conditions.

In his interview, Lubin spoke about how the ecosystem has seen several “booms and busts” within the past ten years. However, he noted that it has never looked so strong than it is today given the strong fundamentals that are seen with the ecosystem. The number of projects that are going on and people brought into the blockchain-sphere are a testament to the evolution of the industry. He added that “the foundational infrastructure is getting built out.”

Cryptocurrency infrastructure is evidently growing at some pace. For example, Bitcoin has its own developed infrastructure. Bitcoin wallets exist, as the case for almost every cryptocurrency available as well as many strong active cryptocurrency exchanges, Bitcoin ATMs in several countries. The ability to buy Bitcoins is now very simplistic, being able to use a smartphone with the ATM.

On the topic of regulation, Lubin commented how there is regulatory uncertainty with respect to the value moment of cryptocurrencies. He then diverted the initial question somewhat, mentioning that boiling down on the blockchain technology, current infrastructure building is decentralizing traditional systems. He listed the likes of trade, finance, tokenized custody systems and many others as being the most notable outcomes. Lubin further explained how regulatory uncertainty is becoming a thing of the past in “various different jurisdictions” across the globe.

Ether is a Crypto “Fuel”

Speaking specifically on cryptocurrencies, Lubin said Bitcoin is a cryptocurrency. However, Ether (ETH) “has some characteristics of cryptocurrency, but it’s really a crypto fuel or a crypto commodity,” additionally noting how Ethereum is a decentralized application platform. In his view, none of these types of platforms will need to be regulated. Finally he said “one doesn’t regulate technology, one regulates the use of the technology.”

Technical Review – ETH/USD 4-hour Chart

ETH/USD 4-hour chart

The current price behavior of ether is simply life-less, within an extremely narrow trading range. This is no thanks to the largely suppressed wider market. Volumes recently hit an all time low for 2018, a notable slowdown since mid-October. Within the last 10 trading days, it has moved in a mundane $8 range. A high seen at $210, the low of the range, $202.

Just like several other cryptocurrencies, price action is moving within a pennant pattern. Given such, it would typically suggest that a breakout is imminent. Should the bulls manage to breakout of the upper near-term resistance, $210, there could be a very fast move back towards $250. This is where the next major supply zone can be observed. Support has proven to be firm at protecting the $200 mark of late, any breach south of that would be catastrophic. The next demand zone is seen down within the $180-160 territory.

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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 50 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Market News

In China, Bitcoin Payments Are Legal After All

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Mainland China’s blanket ban on cryptocurrencies does not apply to merchants who accept and store digital assets such as bitcoin, according to recent report by cnLedger, a local blockchain news outlet. The report sheds some positive light on a region of the world that once dominated the cryptocurrency market.

Bitcoin Payments Not Illegal

Court documents obtained by cnLedger confirm that ownership of bitcoin is legal in China. According to the Shenzhen Court of International Arbitration, bitcoin and other digital assets are recognized as property, which allows individuals and merchants to store and pay with them without breaking any laws.

In a tweet that appeared on Oct. 25, cnLedger reported:

“Chinese court confirms Bitcoin is protected by law. Shenzhen Court of International Arbitration ruled a case involving cryptos. Inside the verdict: CN law does not forbid owning & transferring bitcoin, which should be protected by law because of its property nature and economic value.”

According to cryptocurrency researcher Katherine Wu, digital assets such as bitcoin are currently protected under China’s property and contract law. She explains that, “Because the various legal definitions for crypto under current Chinese laws and regulation are unclear, the arbitrator relied on existing contract law and general provisions of the civil law to determine the contract that is at dispute here.”

China and the Future of Crypto

The Chinese government issued multiple crackdowns on the blockchain market in September 2017, including blanket bans on cryptocurrency trading and initial coin offerings. Efforts to clamp down on illicit crypto trading are ongoing, with central authorities blocking access to foreign exchange services. Earlier this year, authorities targeted 124 offshore cryptocurrency exchanges that were still providing services to domestic traders.

Paradoxically, the Chinese government is researching new use cases for blockchain and cryptocurrency. As Hacked reported back in June, a research lab created by the People’s Bank of China has already submitted 41 cryptocurrency patents. This is a strong sign that regulators will one day embrace the blockchain economy, albeit on their terms and conditions.

China is also home to some of the world’s largest mining manufacturers that serve as key cogs in the global blockchain economy Three firms in particular – Bitmain, Ebang and Canaan Creative – have announced plans to issue public offerings in Hong Kong.

Domestic restrictions have not deterred crypto enthusiasts from finding novel ways to access the market. Investors from mainland China appear to be flocking to Singapore and other blockchain-friendly jurisdictions to set up foundations that invest solely in cryptocurrencies and other blockchain projects. According to local sources, Singapore is home to hundreds, if not thousands, of Chinese token investment funds. Creating such an entity costs only 10,000 RMB ($1,440) and takes just 15 days.

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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 664 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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U.S. SEC’s Review of Bitcoin ETF Applications Shows Progress

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The U.S. Securities and Exchange Commission (SEC) is asking for more comments surrounding a rule change that would deliver the first bitcoin ETF to the market. The Wall Street watchdog filed several amendments today inviting comments either in support or opposition of several crypto trading products, including the GraniteShares bitcoin futures ETF, which the agency rejected in August to the dismay of the crypto community, particularly since this ETF is for bitcoin futures and not the underlying asset.

On the heels of that rejection and several others, including the regulator’s disapproval of the Winklevoss bitcoin ETF, the SEC decided to “stay” its orders in favor of a “Commission review.” SEC Commissioner Hester Peirce, who supports a bitcoin ETF, previously explained that the SEC Commission would review the “staff orders”, which is the process that is currently unfolding.

If approved, the ETF would trade on the CBOE, which is the exchange that filed the application for the rule change to green-light the bitcoin product. The SEC will accept comments on the GraniteShares Bitcoin ETF, either for or against, through Oct. 26 at which time it’s reportedly expected to make its decision. In addition to the bitcoin futures ETF, the CBOE also wants to list the GraniteShares Short Bitcoin ETF.

Other Bitcoin Products

In addition to the GraniteShares product, the SEC is also reviewing other rule-change applications, including NYSE Arca, which is pursuing a handful of Direxion bitcoin products. One of the SEC amendments was for the ProShares Bitcoin ETF and the ProShares Short Bitcoin ETF also on NYSE Arca.

The regulator has similarly opened the floor to comments either in support or opposition of these products through Oct. 26. As a result, it appears possible that the SEC could make another announcement on that date. The bitcoin price is little changed on the development, up 1.3% to $6,581 on volume of less than $4 billion.

Wall Street Veterans

In recent days, Bitwise Asset Management, which is behind a crypto index fund, tapped Wall Street veteran Ric Edelman as an advisor. Edelman Financial Services oversees $22.3 billion for clients.

“I am convinced that the industry will meet the SEC’s requirements and resolve the SEC’s concerns. When that happens, you’ll see a bitcoin ETF,” Edelman told CNBC, adding that it could be in two months or two years.

Meanwhile, bitcoin bull Michael Novogratz, who runs Galaxy Digital, recently pared back his BTC price prediction for this year to below $9,000 though he expects the bull-run to show up in early 2019.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 70 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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