Are We There Yet?
As the end of 2018 draws near, it increasingly seems that the SEC holds the key to the cryptocurrency market success. Most conversations regarding Bitcoin price revolve around a long-awaited approval of a Bitcoin ETF, and investors have unintentionally mandated that this must occur either in Q4 of 2018 of Q1 of 2019.
On Tuesday, rumors from an unconfirmed source suggested that the “approval confidence” for a Bitcoin exchange-traded fund (ETF) was “high.”
The anonymous source also mentioned that “their sources at the CBOE” had a series of “conversations” related to recent meetings held between SEC commissioner Elad Roisman and Bitcoin ETF applicant VanEck-SolidX on October 9.
Bitcoinist reported this week on VanEck reassuring the SEC that concerns with the Bitcoin ETF such as price manipulation have been mitigated, if not “resolved.” But while unconfirmed rumors of “high” chances can impact cryptocurrency price action, it should still be taken with a grain of salt.
EFT Applicants have some Revisions to Make
In other news, SEC Commissioner Kara Stein recently sat down with Bloomberg to chat about cryptocurrency, Bitcoin ETFs and the regulatory situation of digital assets. Stein was asked if Bitcoin should be categorized as a non-correlated asset, legitimate currency, commodity, or a security.
She responded in a somewhat inconclusive manner by mentioning that the SEC only determines “whether it is a security or not and leaves whether it’s a currency or not to others.”
Later, on the issue of Bitcoin exchange-traded funds (ETFs), Stein took a moment to explain what the SEC expects to see before approving an ETF. She advised that all applicants will “have to show up how they can get accurate valuations, how they make sure that there is physical custody, and how to make sure there is adequate liquidity.”
Stein emphasized that it is important that “investors can get the money when they need their money” so custody and liquidity are crucial concerns of the SEC.
Fortunately, a number of the issues previously identified by the SEC are being addressed by large financial institutions. Bakkt has developed a product which launches in December and addresses the SEC’s custody and liquidity concerns as their Bitcoin futures product will be backed by cash and settled daily if investors wish.
Fidelity Investments also has addressed the custody issue by developing a cold storage custody solution called Fidelity Digital Asset Services. Once a solution to the SEC’s fear of manipulation is addressed it’s highly likely that a Bitcoin ETF will be approved.
Bitcoin entrepreneur Alan Silbert meanwhile reacted on Twitter to new data showing the current pace at which new custodial solutions for institutional investors are springing up. Silbert’s forecast of 1-2 years for improving institutional onboarding may now need to be revised.
“It’s moving even faster than I thought,” he wrote.
Admittedly moving even faster than I thought . . .
Good stuff for the ecosystem and for institutional onboarding. https://t.co/sAAmNSoGdz
— Alan Silbert (@alansilbert) October 23, 2018
Do you think the SEC will approve a Bitcoin-ETF by Q1 2019? Share your thoughts in the comments below!
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Rumors: Chances of SEC Bitcoin ETF Approval ‘High’ After VanEck Meeting written by Eustace Cryptus @ https://bitcoinist.com/sec-bitcoin-etf-chances-high/ October 24, 2018 Eustace Cryptus