03 Apr 2019 #Bitcoin
The United States Securities and Exchange Commission (SEC) has decided to delay a rule change decision. The rule in question would change the Securities Act to allow for the listing of Bitcoin-related ETFs (Exchange Traded Funds). The decision to delay the final roll e change decision was given in a notice on the 29th of March.
The February 15th application filed by Bitwise needed a conclusion in 45 days. The application was filed with NYSE Arca. The SEC has not made up its mind and has taken the option to extend the decision-making process by another 45 days. This will give them time until May the 16th to deliberate over whether the rule should be changed and Bitcoin ETFs allowed.
Initial plans by Bitwise and NYSE Arca were to release the ETFs in January. It has been speculated that NYSE Arca tried in 2018 to launch Bitcoin ETFs. They intended to launch both bear and bull linked ETFs. There was no confirmation of this, however.
The SEC has also delayed the VanEck ETF application, taking the 45-day extension which would make the deadline for VanEck's application also in May, albeit on the 21st. VanEck is partnering with CBOE to bring a basket of Bitcoin-related ETFs to market.
CBOE did actually apply last year but removed the application. The removal was due to the SEC operating below capacity due to the government shutdown. The government shutdown was resolved in January. Since there do not seem to be any government problems ahead, a reapplication was followed through. CBOE and VanEck applied on the 31st of January.
The delays experienced by VanEck and Bitwise are nothing new. In 2018, when CBOE and VanEck first applied to release Bitcoin-related ETFs, the date was pushed back twice. Initially, the deadline in July was pushed to August, then to September. The SEC then went on to request more comments with regards to the decision. They had claimed that they weren't able to come to any conclusions on any of the issues presented before them.
Given this history before the government lockdown, the future does not bode well for the applications filed by Bitwise and VanEck. There could be many more discussions and calls for comment before the SEC finally comes to a decision either way, say industry insiders. Many people who are proponents of Bitcoin, cryptocurrency and strong financial instruments at the same time are skeptical that the time is right for a Bitcoin-related ETF.
Notably, Brian Kelly has explicitly stated that there is "no shot" for a Bitcoin-related ETF to come out in 2019. Such a strong position by a man who is himself a Cryptocurrency entrepreneur and regular contributor to CNBC can seem t be somewhat negative. However, he has also said that the more liquid cryptocurrencies will start seeing more use around the world. This is due to political tension forcing certain countries out of gold and dollars.
However, trading in ETFs is another matter altogether and Kelly along with many other industry leaders think that the SEC will not give approval just yet.
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