As the demands for the establishment of a cryptocurrency based exchange traded fund have risen to a new high in the recent past, its establishment might just not be possible by 2018.
Brian Kelly, the Chief Executive Officer of BKCM, has suggested that the establishment of the debut bitcoin exchange traded fund might not get approved by the U.S. Securities and Exchange Commission (SEC) in the current year. Speaking to CNBC, Kelly stated:
I also hope there is an ETF. But I think the chances of a bitcoin ETF in 2018 are relatively low. There is still quite a few things. That doesn’t stop speculation on that. That’s one reason why we’ve seen this bottoming process here from $5,800 to $8,500.
Bob Pisani, a CNBC business expert, also suggested that his personal encounters with the higher authorities of U.S. Securities and Exchange Commission indicate that the regulators sitting in the authoritative positions in the SEC are not yet willing to pass the proposal for a bitcoin ETF very soon. Bob Pisani also stated that the upper body regulators at the SEC are taking a “go slow” approach regarding the establishment of a bitcoin ETF as there are a lot of concerns yet to be resolved concerning its establishment.
Here’s the complete panel discussion about the predictions made regarding the establishment of a bitcoin ETF by some well-renowned financial analysts on CNBC.
The reason behind such a strong drive in regards to the establishment of a crypto-based ETF can easily be understood with the consequences that it is going to make in the crypto-space. Investors from all around the world will be motivated more than ever to invest in this world as it ensures more security and stability in the market. This will not only result in a sudden surge in the price value of bitcoin and other cryptocurrencies but will also make cryptocurrency market a major contributing factor in the global economy.
Post ETF effects can easily be seen from the recent bull run of the bitcoin, owing to just the speculations of a bitcoin ETF getting established in the near future.
Nicholas Merten, a well-renowned cryptocurrency investor, tweeted regarding the establishment of a bitcoin exchange traded fund:
Here’s why a bitcoin ETF matters:
With the release of an ETF, this allows investors to add bitcoin to their retirement portfolio.
Global Pensions Market: $41.3T
If bitcoin captures just 1% of global pensions, that would create $413,000,000,000 of exposure for cryptocurrencies.
— Nicholas Merten (@Nicholas_Merten) July 24, 2018
While it is the need of the hour in the cryptocurrency arena to get a bitcoin ETF established as soon as possible for better stability, the realization of this idea might just not be possible by 2018 due to all the security and transparency concerns that the SEC currently has. In the backdrop of all this, we also have the history of SEC rejecting such proposals regarding the establishment of a bitcoin ETF from last year. It was stated by the SEC that:
The Commission believes that, in order to meet this standard, an exchange that lists and trades shares of commodity-trust exchange-traded products (“ETPs”) must, in addition to other applicable requirements, satisfy two requirements that are dispositive in this matter. First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated.
Since the recent proposal made by SolidX, this time backed by VanEck is a redefined form of the previous such proposals. It is announced by the SEC that in order to make this very critical decision, more time is needed to analyze the current scenario. Further comments from the Securities and Exchange Commission regarding this decision have been postponed up until September, 2018.
The Commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change. Accordingly, the Commission designates September 21, 2018, as the date by which the Commission shall either approve or disapprove the proposed rule change.
In a nutshell, although the wind has started to blow in the direction of the establishment of a bitcoin ETF, it might not be probable enough for the proposing parties to make it possible to settle down the concerns regarding the ETF raised by the SEC by the end of this year, and we might just see a delay in the process.