Bitcoin ETF Decision Delayed, Crypto Prices Tank
The prices of Bitcoin and several other cryptocurrencies have taken a nosedive after the news broke out that the US Securities and Exchange Commission (SEC) has extended its first decision period to either approve or disapprove the VanEck SolidX Bitcoin Trust by 45 days. As a result, the look out designated date for a likely decision is September 30.
From $7,120, Bitcoin lost almost 10% of its value immediately the news is out. Furthermore, it brought every other listed cryptocurrency especially those in the top 100 ranking according to CoinMarketCap ranking into red.
The Commission says it finds that “it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change.”
As of August 6, 2018, the SEC has received more than 1,300 comments on the proposed rule change. Most of them are in support of an approval. However,the delay is not an indication of a positive sign of an approval or maybe it would be approved. A decision on the Winklevoss’ ETF application last year was first delayed until it was later announced that it was rejected. Markets at the time reacted poorly with Bitcoin going from around 1300$ to drop by nearly 30% that day to recover above the $1,000 level after the initial drop. In this case, it is too early to determine what would come next.
Those opposing an ETF maintains that it is irelevant in the long term as Bitcoin will succeed with or without its approval especially since futures market listing didn’t make much of a difference to the technology but rather pushing it towards the old system of centralization. They argue that it is not easy to approve an ETF which is meant for a regulated market for cryptocurrencies whose price movement is pegged to unregulated exchanges all over the world.
Going by a breakdown from a securities litigation lawyer, Jake Chervinsky, the SEC can, and probably will, delay its decision on the much-awaited VanEck/SolidX commodity-backed Bitcoin ETF until March 2019. In the meantime, there are other ongoing proceedings that may be determined before then. One of such is the final outcome on a proposed rule change to list and trade the shares of the ProShares Bitcoin ETF and the ProShares ShortBitcoin ETF under NYSE which is expected by Aug 23.
Also hard hit by the SEC delay news is the price of the world’s third-largest cryptocurrency by market cap, XRP. It fell to a new 2018 low on Wednesday Aug 8. According to Bitfinex, XRP dropped to $0.35 which is about $0.07 lower to its previous all year low of $0.42 in July. Litecoin dropped to its lowest point this year too. It declined by almost 9% from its previous yearly low at $72.