The demands for getting a bitcoin exchange-traded fund (ETF) established are percolating around the financial market for quite some time now. Institutional drive is one of the major reason why this demand has gained major popularity. But will we see a crypto-linked exchange-traded fund get established this year? Although the result seems to be cloudy, there are still chances that we might see it happen this year.
Talking to BlockPublisher, David Gokhshtein, a well-renowned crypto enthusiast, entrepreneur and influencer, seemed to be of the view that the chances of getting an ETF approved by the United States Securities and Exchange Commission (SEC) this year are still there because of the people that are currently placed at the upper level authority at the SEC. David stated that:
We might get an ETF passed this year. Elad Roisman, who’s been named the new SEC commissioner, is pro-crypto and might want to make a name for himself. What better way then getting a BTC ETF passed?
As stated by David, the team involved in decision making at the SEC now contains pro-crypto people. This comes off as good news for the crypto enthusiasts in the financial market as future decisions may come in favor of cryptocurrencies based on this.
If not this year, David believes that we will definitely see an ETF get passed by the SEC next year. David remarked that:
Though if it doesn’t happen this year, I definitely see it happening in 2019.
According to Brian Kelly, the Chief Executive Officer of BKCM, we will not be seeing an ETF get established this year most probably. Brain stated that:
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.
The major reason for the rejections of bitcoin exchange-traded funds as of now is the inability of the proposals, put forward to the SEC regarding ETFs, to fulfill the concerns raised by the regulatory body. The concerns raised by the SEC are related to the issues of valuation, custody, arbitrage, liquidity, manipulation and other risks associated with the crypto market, which all of the proposals have been unable to handle as of now.
The remarks put forward by the SEC regarding the rejection mainly revolve around the issue of prevalence of manipulation and fraudulent activities present in the crypto market. In the rejection posed in front of the proposal made by the Winklevoss twins, which was also backed by Bats BZX, the regulatory body clearly stated that:
Although the Commission is disapproving this proposed rule change, the Commission emphasizes that its disapproval does not rest on an evaluation of whether bitcoin or blockchain technology more generally has utility or value as an innovation or an investment. Rather, the Commission is disapproving this proposed rule change because as discussed in detail below, BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that its rules be designed to prevent fraudulent and manipulative acts and practices.
All in all, it seems that although an ETF might get established this year, chances are that we will most probably see it happening next year. There are still a lot of things that the SEC needs to analyze before it gives its final verdict of approval.