After rallying over Bitcoin ETF hopes in July, and then crashing over ETF fears in August, the market didn’t even flinch as the SEC rejected 9 Bitcoin ETFs at once on August 22nd.
NOTE: The commissioners are going to review the denials and make a final decision according to commissioner Hester Maria Peirce. In other words, there is still a silver of hope. 😉
In 1, 2, 3 orders published, all of which essentially say the same thing, the SEC rejected a total of 9 ETFs from ProShares, Direxion and GraniteShare (although it didn’t reject the holy grail SolidX ETF, these rejections alongside the Winkevoss ETF rejection all paint a pretty clear picture).
That picture is this:
The SEC implies that it gets that Bitcoin and Blockchain are important, and thinks they make sense as innovation and investments, and are still open to a future with Bitcoin products as the space matures… but for the moment with so many coins in so few hands, with so much trading happening outside of the U.S., and with so much potential manipulation, the SEC doesn’t think Bitcoin is in a state where it is ready for an ETF yet.
Thus, ALL ETFs look like they are getting a blanket rejection for the same set of reasons for now (after-all this is the same reasoning given for the Winkevoss ETF).
It is what it is. Bitcoin is a peer-to-peer global currency, and with the free market comes great whales from across the world accumulating and messing with the price. That helps create a market in which we sometimes see 1,000% gains, that creates a market where we sometimes see 90% losses, and that creates a market where we [from the retail HODLer to the biggest whale] don’t get an ETF yet.
What else can one say aside from crypto made its own bed and now its lying in it. I mean, we pump over ETF hopes, crash at the first sign of a rejection, and then get a series of rejections for the exact sort of reason we just pumped and dump. That is karmatic to say the least.
That covered, I think there are a few bullish take aways here regardless.
- To paraphrase heavily: the general dissenting opinion, held by at least one Chairperson of the SEC, is that adoption of products like ETFs will actually help curve the way BTC is consolidated and help ward off manipulation.
- In my opinion: it is hard to argue with the SEC on this one. I think the average crypto fan realizes there is a little more manipulation in the crypto space than is ideal. We all love it when it blesses us with Lambos, and we all hate it when it runs us for our internet money. The SEC has eyes, they can see this. Of course, the space can mature with time. This is a state we are in, not the way it has to be forever. The fact that the space can mature is good.
- The market sort of shrugged off the ETF blues and has moved on. That means the next rejection shouldn’t result in a major drop.
- The SEC ripped the bandaid off and made it clear there won’t be an ETF any time soon. We can stop with the ETF drama for now. It no longer makes sense to pump over ETF hopes, thus there should be no more dumping over ETF fears.
BOTTOMLINE: That was a big rejection from the SEC, and in it they have made their stance clear. That said, as the space matures the SEC clearly is open to the idea of Bitcoin products in the future (which is bullish). The future may be bring, but we aren’t there yet. For now we just have global free market, in a bear market. Hang onto your hats.
- SEC Rejects 9 Bitcoin ETF Proposals. CoinDesk.com.