The Securities and Exchange Commission (SEC) will take a decision on nine bitcoin exchange-traded funds (ETFs) after November 5. This came on the heels of a review of nine previously rejected bitcoin ETFs in late August. The regulatory decision is keenly watched since any positive decision could totally change the overall atmosphere of the cryptocurrency market. The previous rejections were due to the delegation of some tasks to the regulator’s staff.
Additional Rules
The commission has the power to review ‘delegated’ decisions due to additional rules. Earlier, after the SEC declared that it was reviewing the 9 bitcoin ETFs, a fresh deadline of October 26 was set. Though several people thought that the regulator would decide by that date, it was not the case. The latest supporting documents indicated that the SEC will review five ETF proposals from Direxion, two ETFs each from ProShares and GraniteShares. The regulator is seeking comments from concerned parties before November 5.
The SEC has fixed a common deadline for all the nine ETFs focused on the most valuable digital coin. A statement from the regulator said, “Accordingly, IT IS ORDERED, pursuant to Commission Rule of Practice 431, that by November 5, 2018, any party or another person may file a statement in support of, or in opposition to, the action made pursuant to delegated authority.” This would mean that the regulator could decide only after November 5 after assessing the comments received from different parties.
Make a Ruling
The latest development meant that the SEC would give its ruling on the pending digital currency ETFs. Therefore, this will have its likely impact on not only bitcoin price but the entire virtual currency market. For quite some time, there has been silence on the cryptocurrency ETFs front, and the market is eagerly waiting for the outcome. At the same time, there has not been much of enthusiasm among the supporters of bitcoin since the regulator has not given its approval for any ETFs focused on digital coins.
There have been skepticisms among the regulators about the cryptocurrency ETFs since the prices are fluctuating highly. In fact, bitcoin price surged unimaginable level in 2017 from less than $1000 to a whopping close to $20,000 through the price plunged sharply in the currency year. As a result, concerns were raised about the volatility in the most valuable virtual asset price.
Institutions
Currently, institutions are shunning the cryptocurrency ETFs mainly due to two reasons. One is the lack of regulations on the emerging asset class and the second is the absence of secured custodial services. In short, there is a lack of infrastructure that is curbing the entry of virtual assets ETFs. Unless this issue is addressed, institutions will continue to remain in the sidelines only.
Investors and traders are keen that institutions enter the sector thus helping the overall market to not only mature but also stabilize the prices of digital coins. At the same time, there is no guarantee that the SEC will take a favorable call after November 5 given the previous experience on the same subject.
