SEC Unlikely to Approve ETF without FATF green-light.
Hi investors, let's talk Bitcoin and ETFs.
Bitcoin.
Deja vu...
Bitcoin had quite a correction following the news that SEC has yet again refused to green-light the Winklevoss Bitcoin ETF.
The Winklevoss ETF was first rejected in March 2017 under the rationale that Bitcoin markets lacked regulations which, the commission then said, raised “concerns about the potential for fraudulent or manipulative acts and practices in this market.”
True to form the second rejection perfectly echoed this point of view:
"BZX asserts that intrinsic properties of bitcoin and bitcoin markets, including the Gemini Exchange, provide resistance to manipulation. But BZX has failed to carry its burden to demonstrate that its assertion is correct."
News of this second rejection are now casting dark clouds over the fate of CBOE's proposed SolidX Bitcoin Trust as well as a plethora of other ETF proposals pending before the commission.
Crypto markets are no stranger to manipulations and shadiness. The USDT scandal already raised serious concerns over mass-scale wash-trading and numerous ICOs, crypto-currencies (Monero) and services (ShapeShift) are routinely used to launder dirty money as Yaya Fanusie, director of analysis at the Center on Sanctions and Illicit Finance at the Foundation for Defense of Democracies, eloquently explained in this interview with Unchained's Laura Shin.
This new setback underlines the paradoxical importance of regulations in a market that trades a decentralized commodity. In the absence of organic adoption from grass-root users, the Bitcoin market is left hoping that institutions will push the price of an already very inflated market.
There's hope though... but it might not come from banks and institutions. You might remember that the Financial Action Task Force (FATF), which is the financial arm of the G20 and a key trend-setter for global financial regulations, announced about a week ago that they would give their recommendations regarding the global regulation of crypto-currencies in October 2018. What's more the members of the G20 have already pledged to implement these recommendations.
It is my opinion (and you should take it with a grain of salt) that SEC will hold on its decision regarding CBOE's proposal until FATF submits its final recommendations and I believe it's unlikely CBOE will be given the green-light for a Bitcoin ETF unless FATF comes up with some solid recommendations in favor of more liberal crypto regulations. In the mean time I think we might see SEC reject "lesser" ETF proposals, possibly resulting in a new Bitcoin dip or more consolidation around the $7000 level and keep their "ammo" for the more emblematic proposal of all: the CBOE's.
Back to you investors, do you think that my theory is a little too far-fetched? I'd love to know your opinions.
Until then,
FØx.
Your opinion makes sense.
I would even say that during this in-between, the regulators and traditional financial world insiders are making a good opportunity for them to accumulate BTC and Alts at low price before the next big bull run (when the green-light will come, not an "if" situation but "when", I think we all agree). So far the strategy seems to work:
Just my opinion ;-)
Yeah there is possibly some of that happening @cknr7 although I really doubt SEC is loading the boat on BTC right now. For me the fundamental reason why the SEC rejected the ETF is "market manipulation", not the quality of the financial product itself or who proposed it so I do think that this rejection will have a knock on effect on the CBOE proposal... I hope I'll be proved wrong though.
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