U.S. SEC Postpones VanEck-SolidX Bitcoin ETF Decision, Markets Sell Off
If you’re wondering why the cryptocurrency market is suddenly in freefall, look no further than the probability of a bitcoin ETF. The U.S. Securities and Exchange Commission (SEC) issued an announcement that it was delaying its decision on the rule change that would pave the way for the product to be traded on the CBOE until Sept. 30. The VanEck-SolidX bitcoin ETF is the market’s best hope for such a product after a similar application proposed by Cameron and Tyler Winklevoss was recently shunned. Traders were hoping for a decision by as soon as Aug. 10.
In response, the bottom fell out in the bitcoin price, sending it from approximately $7,000 to $6,765 in a freefall whose speed was only rivaled by the recent run-up in the bitcoin price from the $5,800 level in anticipation of a potential bitcoin ETF. The silver lining is that Wall Street’s top regulator didn’t put the kibosh on this product, but on the downside is there could be even more delays to come.
The SEC announcement, which surfaced on Tuesday, revealed that the regulator has been flooded with “1,300 comments on the proposed rule change.” But apparently, regulators have more questions, as evidenced by their decision to push back their decision.
“The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change,” according to the SEC statement. The agency identified Sept. 30 as the date by which they will “either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.”
“Market’s Not Ready”
If you ask cryptocurrency trader Brian Kelly of the firm that bears his name, the securities regulator is likely to choose option three and delay its decision yet again. He said on CNBC this evening that “the market’s not ready” for a bitcoin ETF. Kelly noted that selling in response to this delay “is the wrong way to do crypto investing,” adding “there is more to this story than just an ETF.”
Nonetheless, trading in the cryptocurrency market of late has been fueled by emotions tied to the probability of a bitcoin ETF, with pundits suggesting that the passive investment product could catapult BTC into the 401(k) retirement plans of mainstream America. CryptoCompare Co-Founder Charles Hayter is quoted in MarketWatch as having said: “The ETF decision is going to be the next catalyst for the market. There’s a lot of uncertainty around the decision, but also a lot of hope.”
Featured image courtesy of Shutterstock.