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CBOE Pulls VanEck Bitcoin Exchange Traded Fund (ETF) Filing

Yesterday the SEC announced that CBOE had pulled its filing for an Exchange Traded Fund (ETF) to list shares of the VanEck Solid X Bitcoin Trust. While the announcement initially raised concerns from the Crypto community, an interview with CNBC later that day, the CEO of VanEck clarified that the withdrawal was a temporary measure. The Trump administration’s government shutdown has significantly affected the SEC’s manpower and resources. Therefore, the lack of resources could, justifiably, lead to a poor decision.

Ever since the Winkelvoss twins filed an ETF application that was rejected by the SEC in early 2017, numerous contenders have sought approval for the first Bitcoin futures index. The Crypto community has watched these applications with keen interest, as a means to establishing both credibility and mainstream adoption.

Why is a Bitcoin ETF Important?

There is an estimated USD $70 trillion held by institutional investors globally. Without a trusted, regulated platform to facilitate investment, these funds remain largely inaccessible to the Bitcoin and wider Crypto market. The start of 2019 which has been pockmarked by the hack of the Cryptopia Exchange and news of KYC data leaked from major Crypto exchanges which has only reinforced the need for more mature infrastructure.

It is worth considering that for all its influence, the SEC is only one regulatory body in one market. As other countries start advancing their own regulation, focus may shift away from the SEC to guide the regulatory landscape. The listing of the Amun Crypto Basket ETP on the SIX Swiss Exchange last year has seen the highest traded volumes of any exchange-traded product, and is perhaps the first validation of this.

2019 will likely see further volatility within the regulatory landscape for Cryptocurrencies. In addition, the ETF story is likely to remain one of the main protagonists. Industry analysts suggest that it may yet be too early for the SEC to push an ETF application through. How an ETF plays out globally will be a telling sign of sentiment from both the financial and regulatory powers.

Dr Prash – CEO Caleb & Brown

Image source: Fortune
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SEC Rejects 9 Bitcoin ETF Proposals

We’ve been hearing about Bitcoin ETFs frequently of late. From the anticipation and subsequent rejection of the Winklevoss ETF to the application of the VanEck SolidX Bitcoin Trust.

Yesterday, the Securities and Exchange Commission (SEC) has published three orders rejecting 9 bitcoin exchange-traded fund (ETF) proposals. It’s a pretty long list.

  • ProShares Bitcoin ETF
  • ProShares Short Bitcoin ETF
  • Direxion Daily Bitcoin Bear 1X Shares (“1X Bear Fund”)
  • Direxion Daily Bitcoin 1.25X Bull Shares (“1.25X Bull Fund”)
  • Direxion Daily Bitcoin 1.5X Bull Shares (“1.5X Bull Fund”)
  • Direxion Daily Bitcoin 2X Bull Shares (“2X Bull Fund”)
  • Direxion Daily Bitcoin 2X Bear Shares (“2X Bear Fund”)
  • GraniteShares Bitcoin ETF (“Long Fund”)
  • GraniteShares Short Bitcoin ETF

This week the market had a short-lived burst in price in anticipation of the decisions from $6400 to a high of $6899 (USD) and then correcting right back to the $6400 range today as though the market had no genuine belief that those applications would pass.

Will we ever get an ETF?

The VanEck SolidX Bitcoin Trust seems to be the most likely candidate as the first successful Bitcoin ETF and is due for decision at the end of September, but can (and is highly likely to) be delayed until the final date in February 2019.

The language of the rejections to date presents a hopeful tone, stating the SEC “emphasizes that its disapproval does not rest on an evaluation of whether bitcoin or blockchain technology more generally, has utility or value as an innovation or an investment.”

These words are in accord with SEC commissioner Hester Peirce assertion that it is not the SEC’s role to be the gatekeeper of innovation. They seem to be waiting for certain infrastructure to be available for the surveillance of potential market manipulation before giving out that the elusive ETF approval.

What is a Bitcoin ETF anyway?

A Bitcoin Exchange-Traded-Fund is a fund that owns underlying assets, (in this case, Bitcoin), and then divides the ownership of those assets into shares.

Example: If the fund owned 20 Bitcoin, and was divided into a total of 10 shares, of which Alice owned 1 share, then she’d have indirect ownership of 2 Bitcoin. The important distinction is that it can be traded like shares on the stock market.

This can play a significant role in pushing up bitcoin’s price because currently, institutions don’t have an easy way of gaining exposure to bitcoin without having to deal with the “physical” custody of the private keys. This will finally open the doors for institutions with billions in assets under management to add 1% of bitcoin to their portfolio as a non-correlation asset.

Jackson Zeng, COO, Caleb and Brown breaks down the jargons around Bitcoin ETF in this video.

  • What is a Bitcoin ETF?
  • Why does it matter?
  • How does this affect the market?

Jackson Zeng is the COO at Caleb and Brown is available to guide new and seasoned investors.

About Jackson Zeng:
Jackson has five years of trading experience in the cryptocurrency space and founded Bit By Bit Capital, one of Australia’s first private trusts investing in cryptocurrency.

connect with us

Call Jackson on +61 1800 849 149  or Contact Us to discuss further.

Image source: Toshi Times

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What is a Bitcoin ETF?

There is a huge emphasis on Bitcoin ETFs in the investment community.

Jackson Zeng, COO, Caleb and Brown breaks down the jargons to give his take on this hot topic.

  1. What is a Bitcoin ETF?
  2. Why does it matter?
  3. How does this affect the market?

1. What is a Bitcoin ETF?
A Bitcoin Exchange Traded Fund (ETF) allows Bitcoin to be traded on the stock market. A trust would hold the asset on behalf of the fund while investors can trade its shares on the exchange.

2. Why does it matter?
Trading of Bitcoin currently involves digital asset custody. Investors and Institutions are concerned about handling that risk themselves. A Bitcoin ETF provides a new option for traders to get exposure to Bitcoin without having to worry about securing the digital asset themselves.

3. How does this affect the market?
Reducing the barriers to entry enables a new category of investors to join the market, which may spell greater liquidity and positive price movement as that money enters the space. It will also be a step forward in regulatory clarity on Bitcoin

Experts views from other sources:

connect with us

Jackson Zeng is the COO at Caleb and Brown is available to guide new and seasoned investors.

About Jackson Zeng:
Jackson has five years of trading experience in the cryptocurrency space and founded Bit By Bit Capital, one of Australia’s first private trusts investing in cryptocurrency.

Call Jackson on +61 1800 849 149  or Contact Us to discuss further.