Bitcoin ETF

Over the past few months, there has been plenty of talk around the status of submitted Bitcoin ETF’s. For those that are unaware, an ETF stands for exchange traded fund and is a way to trade an asset or security on a regulated exchange.

At press time, there are currently two submitted ETF proposals. One is the Cboe VanEck proposal that has been around for months now. The other was published last week by Bitwise for the New York Stock Exchange. As of February 20th, the SEC will have 45 days to make a ruling on the pending ETFs.

In the past, we’ve seen several other attempts in setting up Bitcoin ETF’s fail. Most notably was the Winklevoss Twins attempt that was rejected in 2017 and again in 2018.

Matt Hougan, who’s involved with the Bitwise proposal went on to say to Coindesk, “A year ago there was maybe one qualified crypto custodian… and now there are half a dozen, and that number will go up from here.”
Why do Bitcoin ETF’s keep getting rejected?

There are a few reasons why Bitcoin ETF’s repeatedly get rejected. The largest one is the fear that Bitcoin markets are manipulated heavily. The SEC has even commented on Tether (USDT), and how it appears to prop the Bitcoin price up. Another reason Bitcoin ETF’s have been rejected is due to it being unclear where the official Bitcoin price at any given time is determined.

The VanEck proposal is attempting to form this from price action on large over the counter (OTC) trades, while Bitwise plans to use the average of high volume exchanges. Depending on the SEC’s preferences, it’s possible one gets rejected while the other gets accepted.

Why do Bitcoin ETF’s matter?

In Bitcoin’s case, an ETF would allow users to own Bitcoin without having to deal with storage. Too often we see uneducated cryptocurrency holders lose their funds on centralized exchanges from hacks and other careless mistakes. By simplifying the process, the door is opened for thousands of new cryptocurrency holders.

Conclusion

Regardless of which cryptocurrencies you support, the introduction of a Bitcoin ETF would bring an enormous amount of mainstream adoption. The SEC has until April 5th to decide, so keep an eye out for the ruling.

Do you think a Bitcoin ETF will finally be accepted? Let us know in the comments below.