Bitcoin Price Drops On ETF Denial
Not the much-anticipated Van Eck SolidX CBOE ETF which is currently under consideration and an outcome expected as from August, the SEC’s denial of the Winklevoss ETF has sent the price of Bitcoin down by almost 4%. The proposal by Cameron and Tyler Winklevoss, founders of crypto exchange Gemini, is the first-ever for a cryptocurrency ETF. The Thursday July 26 denial is the outcome of an appeal from a 2-year old application which was rejected about a year ago. The initial denial was based on lack of regulation and security.
As at Thursday, Bitcoin was about $8,300 on Bitfinex. Immediately after the Winklevoss ETF rejection news, Bitcoin’s price slumped to $7,878 and has since been trying to find its way back up. The rejection, despite a lack of evidence it hurts the CBOE ETF being considered, tends to show how important an ETF is.
As expected, the crypto community has been expressing their displeasure at the development. Also, a SEC Commissioner, Hester M. Peirce, has since published her dissenting opinion on the Commission’s rejection of the ETF saying she rejects the role of gatekeeper of innovation as against the SEC’s mission to protect investors, foster capital formation and facilitate a fair and efficient markets.
She notes in the dissent which has won admirations deom several tech enthusiasts: “Many investors have expressed an interest in gaining exposure to bitcoin, and a subset of these investors would prefer to gain exposure without owning bitcoin directly. An ETP based on bitcoin would offer investors indirect exposure to bitcoin through a product that trades on a regulated securities market and in a manner that eliminates some of the frictions and worries of buying and holding bitcoin directly. If we were to approve the ETP at issue here, investors could choose whether to buy it or avoid it. The Commission’s action today deprives investors of this choice”.
It is clear that the crypto space needs to be regulated and there is a belief that an ETF can help put that into motion. With pressure mounting, all eyes are on what could become of the CBOE filing which is supposedly not related to the Winklevoss’.
Olusegun Ogundeji writes on tech-related issues including from the crypto/Blockchain space.
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