No Surprise: SEC Says No Bitcoin ETFs
The speculation can finally be put to rest. A bitcoin ETF coming to market in 2018. Not happening and the Securities and Exchange Commission (SEC) pretty much sealed the deal on it.
SEC Rejects All Proposed Changes
Most people were expecting a ruling on just the ProShares ETF applications as the deadline for those had arrived. However, the SEC decided to take care off them all in one fell swoop. Also denying the applications from Direxion and GraniteShares.
Below is verbiage from the SEC's ruling:
"This order disapproves the proposed rule change. Although the Commission is disapproving this proposed rule change, the Commission emphasizes that its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment. Rather, the Commission is disapproving this proposed rule change because, as discussed below, the Exchange has not met its burden under the Exchange Act and the Commission's Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that a national securities exchange's rules be designed to prevent fraudulent and manipulative acts and practices. Among other things, the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are 'markets of significant size.' That failure is critical because, as explained below, the Exchange has failed to establish that other means to prevent fraudulent and manipulative acts and practices will be sufficient, and therefore surveillance-sharing with a regulated market of significant size related to bitcoin is necessary to satisfy the statutory requirement that the Exchange’s rules be designed to prevent fraudulent and manipulative acts and practices."
Surprised, not me
Maybe I'm not much of an optimist, but on the other hand maybe I'm just a realist. The writing was on the wall with these as it was only months ago that the Winklevoss twins attempt at an ETF was denied.
Did we really think that much in the crypto market changed since then to alleviate the SEC's concerns? I mean, come on let's be logical here.
The manipulation and fraud concerns they have are technically still valid - atleast in the sense of traditional financial transacting, which is what the SEC does.
I guess since the ProShares were to be based off bitcoin futures as opposed to crypto exchanges that gave people a sliver of hope to ride on. However, I'm pretty sure there is one key item that will be needed before we see bitcoin ETFs...
Custodian
Once there are at least a couple "qualified" custodians then maybe, just maybe the SEC will change its tune.
If you are unaware of what a Custodian Bank is, essentially it's a specialized financial institution responsible for safeguarding a firm's or individual's financial assets and is not engaged in traditional retail or commercial banking.
If you remember Coinbase recently created a division to provide this service. Thus, we are headed in the right direction. I think it is just a matter of time before a "familiar" financial name comes on board with something like this. There is too much money to be made not too.
As for my guess on when we will see Bitcoin ETFs. I'm thinking sometime in Q1 2019 may have a shot.
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Disclaimer: All info in this post is my opinion and for informational purposes only
Free e-book: ScaredyCatGuide to Knowing What the Heck Bitcoin Is
Disclaimer: All info in this post is my opinion and for informational purposes only
This may explain that (from CoinMarketCap's yesterday newsletter):
Howdy @ScaredyCatGuide.
We saw your message. Sorry about that. Everything is manual, and for some reason your market articles got missed. Our feed is growing and not every article is market related, so it happens sometimes. Eventually we'll have a toggle so you can submit articles for publication.
You can post in the Trading Pits and we'll respond there. We still monitor our Discord too, though not as closely as we used to since our Trading Pits are open now.
You can reach out to several of us personally through Discord too.
Thanks!
Ah ok, no worries. May I have a link for the discord server and I will add it. Thanks for getting back to me, appreciate it.
Here ya go - https://discord.gg/mmr8WjS
You can email [email protected] too.
Generally, we see all the articles in the feed. But we're still human based, so tend to make mistakes. :)
Thanks!
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Great and informative post, thanks.
Thanks man, hoping it comes up on TIMM. This and my last post I did through the site have not. I pinged timm through a post comment as I don't know who/how to reach out otherwise.
I see it on TIMM,
Yeah, I'm not too surprised. Then again, I'm not really sure I fully understand what the major benefit would be that would bring in tons of investors. Have you done a post about Bitcoin futures, as to what they would mean and what the benefits would be and such? If not, maybe you should. I understand futures when it comes to oil and such, but I've never traded on the futures market.
There is one thing I and everyone that has been following crypto for a while fully understands though, and that is that old money doesn't trust in crypto, and treats it like it's voodoo economics. If anyone's going to make any headway in this, it's probably going to be a "traditional" financial institution. I'd also be willing to bet that their security will likely be far lower than a lot of the people in crypto now, some of which are incredibly paranoid, and rightly so. As these financial institutions get into crypto, at least one of them is going to make a MAJOR mistake, and it's going to hurt, if not downright kill them. The pessimist in me says that a big bank trying to do something in crypto has a much better chance of getting approval for whatever they wanna do, no matter if they are following what might be considered best practices or not.
It'll be weird when we're able to deposit crypto in our bank account, or have them hold it for us.
I especially agree with the last few sentences of your comment.
Haven't done a btc futures post, will look to do one next week. In the end all it is, is a derivative to speculate on btc, that is the short version lol.