SolidX ETF Postponed… But if You Understand Bakkt, then You Understand Why it Doesn’t Matter Outside the Current Market Panic

The SolidX ETF was postponed by the SEC until September 30, 2018. This decision was expected Aug 16, but came Aug 7 instead. Although many were hoping for approval, an extension is notably not a denial. Also, a new service called Bakkt goes a long way to making the SolidX approval a non-issue.[1][2]

READ: Read the official SolidX ETF postponement document here:SECURITIES AND EXCHANGE COMMISSION(Release No.34-83792; File No. SR-CboeBZX-2018-040).

In simple terms, people were excited about the SolidX ETF because it was a proposal for an ETF to be listed on the CBOE exchange (one of two exchanges who does Bitcoin futures). This would give retail investors a way to invest in Bitcoin via their personal brokerage accounts, IRAs, and 401k and it would be a sign of crypto being embraced and of a potential increase in adoption.

So from that frame alone, the approval of an ETF would have been a big plus.

That said, there are a few notes here which make the postponing of the ETF not a very big deal.

First off, it was expected that it would be rejected or postponed (like all other Bitcoin ETFs so far). Here being postponed is better than a rejection, because postpone means the SEC wants further time to discuss and examine the matter.

Second off, and perhaps more importantly, Bakkt is an ever bigger deal and it does all of what an ETF would do and much more. Bakkt is not as an ETF, it is as a way to directly buy Bitcoin, a custody solution for Bitcoin, and a regulated exchange for Bitcoin. Also, Bakkt is a service by one of the biggest players in the stock game ICE (the parent company of the New York Stock Exchange NYSE). Not only that, but one problem with the ETF is that a regulated US custody solution was arguably needed before the SEC was going to approve an ETF. Given that Bakkt has a custody solution, Bakkt along with Coinbase Custody could help tip the SEC toward approving an ETF when the extended deadline rolls around in September.

Getting the SEC to approve an ETF is a tall order… but the reality is Bakkt preforms essentially every function the ETF would have. When you consider that the market did not know about Bakkt when it rallied over the ETF in the first place, it makes this current dump a bit of a head scratcher.

In summary, for those who understand why the SolidX ETF was important, the Bakkt news sort of overrides things. It was a bigger victory and an unexpected one. It is real. It is happening in November.

For those who are doing short term trading based on market sentiment, and for those expecting the buy the rumor sell the news mentality of crypto markets to hold true, clearly anything other than an approval was going to cause a dip in the market. The dip is real, the market is panicking, that happened, and it was not good for holders.

Long term investors might see the dip as a sale considering Bakkt is launching in November, others might see the denial as a foreshadowing of lower lows. It really depends on one’s perspective, strategy, and goals.

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Citations

  1. SECURITIES AND EXCHANGE COMMISSION(Release No.34-83792; File No. SR-CboeBZX-2018-040). Coindesk.com.
  2. SEC Delays VanEck-SolidX Bitcoin ETF Decision to September. Coindesk.com.


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