Bitcoin ETF approval and the final decision date, the market is not expected to be optimistic

Due to the close to the time when the US Securities and Exchange Commission (SEC) made a final decision on the Bitcoin ETF proposal in October, and VanEck / SolidX recently withdrew the proposal, another Bitcoin ETF proposal filed by Bitwise continues to await regulatory approval, multiple times. The delayed Bitcoin ETF has recently received another attention.

According to media reports, SEC Chairman Jay Clayton said at the Delivering Alpha conference jointly held by CNBC and institutional investors yesterday that Bitcoin needs to be better regulated before entering the mainstream exchange. Moreover, Clayton also warned that it is very difficult for investors trying to profit from crypto assets to achieve "price discovery," he said:

"If (investors) think that this price discovery is as strict as the Nasdaq or the New York Stock Exchange… they are very wrong. We have to reach a place where we can be sure that the deal is better regulated."

Prior to this, documents filed by the US Securities and Exchange Commission (SEC) on September 17, local time, showed that VanEck and SolidX had withdrawn their second Bitcoin exchange-traded fund (ETF) proposal. The Bitcoin ETF proposal, which has been postponed three times by the SEC and has been delayed several times, is finally approaching the final decision date. It failed to wait until October 18th, and finally with VanEck taking the initiative to withdraw the early application.

When VanEck made a withdrawal of its Bitcoin ETF proposal, Bitwise, who had applied for the application process almost simultaneously with VanEck, chose to continue to wait for the final decision of October 13.

Bitwise Chief Operating Officer Teddy Fusaro has previously responded that the Bitcoin ETF application will continue. In an interview, he said: "Historically, the approval of new ETF products has been a process that has taken many years, so we are not surprised that VanEck's Bitcoin ETF proposal is withdrawn. Bitwise will continue to work on Bitcoin ETFs. And through research to answer all the major issues raised by the SEC over the years, we intend to continue to highlight how the industry can make progress in meeting these difficult issues."

However, this decision to continue to wait is questioned by the market, and the problem is mainly concentrated in two aspects:

On the one hand, financial products such as Bitcoin ETFs do not meet SEC-approved standards. Compared with VanEck / SolidX's Bitcoin ETF proposal, the possibility of Bitwise's Bitcoin ETF proposal being rejected is still very large.

Jake Chervinsky, a US law enforcement defense and securities litigation attorney, has raised concerns about the number of tweets posted on Twitter. He commented that the bitcoin ETF was only 0.01% approved.

First, he believes that the US SEC has repeatedly stated that the main obstacle to the approval of Bitcoin ETFs is the lack of regulatory sharing agreements with larger regulated markets. And the SEC's point of view is "nothing". A bitcoin market is regulated. It is therefore undoubted that ETF sponsors such as VanEck and Bitwise have difficulty signing a regulatory sharing agreement with a non-existing “normative” market.

Second, there is no reason to believe that Bitwise is more likely than VanEck to overcome this obstacle. He said that in this round of ETF proposals, VanEck and Bitwise tried to meet the US Securities and Exchange Commission's concerns about price manipulation by improving pricing mechanisms rather than regulatory sharing agreements. In theory, this should be an acceptable alternative to the requirements of the Transaction Act, but VanEck withdraws at this time, and Chervinsky speculates that VanEck is convinced that the SEC does not accept its alternatives to solve this problem. The application was withdrawn. If this is true, it is hard to imagine that Bitwise's approach will improve (although not entirely impossible).

On the other hand, once Bitwise receives a formal “rejected” result, there is a precedent for such approval or it will increase the difficulty of subsequent approval of the Bitcoin ETF.

Bitwise's Bitcoin ETF, filed in conjunction with Arca on the New York Stock Exchange, has submitted three applications in the same way as VanEck / SolidX since it was submitted in mid-January. The SEC should have decided on Bitwise on April 1st, but The time was postponed to May 21 at the end of March. Then on May 15, Bitwise received the second delay notice from the SEC before VanEck, and the deadline was postponed until August 14. Since then, along with VanEck, he received the third delay on August 12th, and the final time was set on October 13.

The SEC can make up to three extensions for any rule change proposal, which means that once the SEC approval is passed, Bitwise's Bitcoin ETF proposal will face the SEC's first formal proposal for the Bitcoin ETF. "Reject" the result.

Chervinsky said:

“I suspect that VanEck tends to withdraw their offer instead of letting the SEC write a formal directive explaining why it is flawed. These instructions will be a precedent for the SEC's future considerations, and a bad precedent may result in The approved tasks have become more difficult."

The US House Financial Services Committee announced a hearing on its official website on the 19th, and plans to ask the SEC next week about cryptocurrencies and Facebook's Libra project, including many Other topics. Although the committee did not clearly indicate the areas that may be of interest, the SEC's use of the Howey test as an analysis of whether a token is an investment contract also includes an explanation of the definition of an exchange-traded fund (ETF). This led to conjecture, and the Bitcoin ETF may also be discussed at the hearing.

Author: Xi breeze

Source: Finance and Economics Network on Finance