All may not be lost for cryptocurrency ETFs.
Sure, the US SEC may have jolted the market with more delays
But that was to be expected. Remember, the U.S. SEC can’t just approve the cryptocurrency ETFs because they feel like it. Or because traders are begging and pleading for it.
The government agency has to prevent manipulation and fraud here. And until it’s comfortable, it will not approve anything. That’s why it denied approval for two ETFs by ProShares that would track Bitcoin future contracts. It denied five inversed and leveraged ETFs from Direxion. And it denied one from GraniteShares.
It also noted that failure to prove Bitcoin markets are “markets of significant size” as another reason. This is similar to the reasoning behind denying the Winkelvoss ETF, too.
U.S. SEC has Thrown a Lifeline
The SEC will review the latest decision, which it had delegated to others for decision.
That’s in accordance with Rule 431 of the Commission’s Rules of Practice.
In English: The Commission (Chairman and Commissioners) delegates some tasks to its staff. When the staff acts in such cases, it acts on behalf of the Commission. The Commission may review the staff’s action, as will now happen here,” says US SEC Commissioner Hester Peirce.
Bitcoin ETN: Our Current Cryptocurrency Alternative
We’re not sure of when the review will take place, or potential outcome.
For the time being, U.S. investors now have an alternative – a Bitcoin ETN, or an Exchange Traded Note.If the ETN is widely-adopted by U.S. investors and performs well it may have a positive effect on the SEC’s decision on an ETF. You may remember the much-touted VanEck Bitcoin ETF decision was delayed until September 30, 2018.
As we wait on the U.S. SEC, at least we have exposure to the ETN.
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