Institutional demand has been piling up with each passing day across the crypto space for the establishment of a bitcoin exchange traded-fund (ETF). But as of now, the major regulatory body in the form of United States Securities and Exchange Commission (SEC) has not been very approving of a crypto-linked ETF. This may lead serious concerns regarding the survival of bitcoin and other digital assets across the digital currency world. But as suggested by Chris Burniske, partner at Placeholder VC, bitcoin is probably going to survive the trials of time.
Upon inquiry by BlockPublisher about the survival of bitcoin in the hindsight of all the crypto-linked exchange traded-funds getting rejected by the SEC and minimal institutional support, Chris Burniske replied with a ‘Yes’. Although in his original tweet, Chris stated that no digital asset is too big to fail.
— Chris Burniske (@cburniske) August 27, 2018
The establishment of exchange traded funds seem necessary if we consider long term growth and stability of the cryptocurrency market. With more and more institutional money pouring in the crypto market, digital assets will move towards more stability in the future.
The reasons behind the SEC rejecting the establishment of a crypto ETF are primarily manipulation and fraudulent activities. Crypto space as of now is rife with illegal activities. The major priority put forward by the SEC is the protection of investors. As there is no regulatory framework currently imposed on the crypto market, the investors are exposed to fraudulent activities. Manipulation is also one of the factor that is preventing the ETF establishment. In the concerns raised by the SEC regarding the ETF proposals, it was stated regarding mainpulation of the crypto market by the regulatory body that:
The Commission has also discussed concerns relating to the risk of fraud and manipulation in cryptocurrency markets in orders denying exchange proposals to list the shares of commodity trusts that would hold cryptocurrency. In addition, a number of recent media reports have highlighted a range of possible vectors for potential manipulation of cryptocurrency markets. Although some funds may propose to hold cryptocurrency-related products, rather than cryptocurrencies, the pricing, volatility and resiliency of these derivative markets generally would be expected to be strongly influenced by the underlying markets.
All in all, it seems that even without getting an ETF, it is likely that bitcoin will survive the trials of time, as evident from its current bullish trend in the hindsight of all the recent ETF rejections by the SEC.