SEC says No to Bitcoin, Price Dives Deep
Last week the SEC denied a Bitcoin’s ETF proposal filed by the Winklevoss Brothers.
FLASH: On March 10 after the closing of the NYSE, the Securities and Exchange Commission (SEC) rejected the rule change for the Bitcoin ETF due to regulatory concerns. Following the announcement, the price per Bitcoin dropped to a low of $1,020. The price has since rebounded to the $1,180 mark, at the time of writing.
In the released statement, the US government securities regulator claimed that Bitcoin’s markets were not regulated enough and that exchange would not be able to enter the appropriate “surveillance-sharing” agreements because of the cryptocurrency’s nature.
Bitcoin’s market reacted sharply to the Southside onthe statement as the price dropped 30% quickly.
The Winklevoss Brothers have been waiting on the SEC’s approval of their ETF for about 3 years. The proposal has been delayed multiple times and each time a few changes were required.
But, no amount of changes to the original proposal could have changed the SEC’s decision, as they claim that “the Commission believes that the significant markets for bitcoin are unregulated”.
While many may disagree with that statement, at the end of the day the SEC has the final say.
While this ETF has been disapproved, there are others that are waiting a decision.
The BitMEX contract which allowed users to be on whether or not the ETF would be approved reach as high as 60%. This goes to show that traders did not expect the SEC to deny the ETF.
While the approval of the ETF would have exposed Bitcoin to major investors, the fact that it was disapproved goes to show that there is still work to be done.
China is cracking down on cryptocurrency regulation, which may be what the SEC wants to happen before they can approve the exchanged traded fund.
Unlike other ETFs, Bitcoin is a global asset, so the SEC wants to make sure the Bitcoin markets are regulated all over the world not just in the US.
The SEC statement claimed that “the exchange must have surveillance-sharing agreements with significant markets”, it seems that the agency might be waiting for China to regulate its market before thinking about approving the ETF.
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