The SEC has issued a statement that confirms the agency’s postponement of a decision on the Cboe BZX Exchange application and a rule change that would allow Cboe to create Bitcoin Exchange Traded Funds (ETFs).
The news dealt a bit of a blow to the price of Bitcoin, which dropped quickly by several hundred dollars (down from $8,170 on August 1 to $6,292 at this writing).
The SEC determined that it was appropriate that the agency takes a longer period of time to come to a final conclusion in the matter. The agency received over 1,300 comments about the proposed rule change that would allow the trading of ETFs.
Although the news is disappointing to Bitcoin fans who were hoping for a swift decision, at least there is a deadline on the horizon – and an even earlier decision is possible.
The proposed bitcoin exchange-traded fund (ETF) would have been the first financial product of its kind. ETFs are seen as a way for institutional investors to enter the crypto trading space in a safer manner than by buying bitcoin on a crypto exchange.
The bid to launch an ETF backed by actual bitcoins rather than futures is the brainchild of investment firm VanEck and financial services company Solid X. This is VanEck’s third attempt to launch a bitcoin ETF.
A number of other applications are underway to get a bitcoin ETF listed, but at this writing, none have been approved by the SEC. Cameron and Tyler Winklevoss, founders of crypto exchange Gemini, found that their second attempt to list their ETF was recently rejected by the SEC.
Likewise, VanEck’s attempts have twice previously been rejected by the SEC; but fans are holding out hope that the agency’s announcement to postpone its decision could mean that approval is possible.
Although bitcoin fell as a result of the SEC statement, it has experienced dramatic price fluctuations in the past. Since interest in the world’s most popular digital currency has increased, Bitcoin’s share of the crypto market is nearing where it was when Bitcoin hit its highest price level in history.