It’s official – after waiting for the submitted proposals to be officially handed to SEC and after reviewing them for a couple of days, the Securities and Exchange Commission (SEC) disapproved nine more Bitcoin ETF applications.
It all started when the US regulator rejected two ETFs by ProShares that would be used for tracking Bitcoin future contracts, followed by five inversed and leveraged ETFs from Direxion, and another one fro GraniteShares.
SEC cited that the applicants did not meet their requirement of designing rules to prevent these malpractices. The judgement by the Commission also mentioned that they had not revealed any evidence that proves the significant size of the Bitcoin futures market. As it read:
“Surveillance-sharing with a regulated market of significant size related to bitcoin is necessary to satisfy the statutory requirement that the Exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”
The SEC also made it clear that the technological and investment potential of Bitcoin and blockchain technology before taking its decision. The outcome rested on the failure to abide by individual sections of the Exchange Act.
As the agency cited when receiving the letter from CBOE:
“Additionally, the President and COO of CFE, recently acknowledged in a letter to the Commission staff that ‘the current bitcoin futures trading volumes on CBOE Futures Exchange and CME may not currently be sufficient to support ETPs seeking 100 [percent] long or short exposure to bitcoin’.”
Just like the last time when the SEC denied Winklevoss Twins’ Bitcoin ETF, the reasons mentioned are the same.
However, despite the series of disapprovals, many people are confident that SEC will approve a Bitcoin ETF soon. Also, it is evident that the outcome of Bitcoin ETFs concerns the performance of Bitcoin markets in general – which is why Bitcoin reacted, dropping 4% in just a couple of hours.
The question now is – will Bitcoin drop?
Bitcoin’s Problems Can Be Solved By Leaving The Proof-Of-Work System: BIS
“Simple calculations suggest that once block rewards are zero, it could take months before a Bitcoin payment is final, unless new technologies are deployed to speed up payment finality.”However, in the study there is little praise for the Lightning Network as well, claiming that it could help but the real remedy for improving the network would be by saying goodbye to the proof-of-work method. Leaving the protocol would likely require a sort of coordination and possible institutionalization. The conclusion is basically that ‘’in the digital age too, good money is likely to remain a social construct rather than a purely technological one.’’ The Bank for Institutional Settlement is basically a group of 60 central banks which account almost 95 percent of the global GDP. BIS issued another report a few weeks ago where it was explained that nearly seventy percent of the central banks in the world are researching the option for a central bank digital currency and how to issue it. The major financial institution found a solid correlation last September between the crypto prices and the news about regulation that swamped the news platforms worldwide.
Bitcoin ATMs Number Keeps On Increasing, The Question Is Why?
UN Thinks Bitcoin & Crypto Are “The New Frontiers” In Finance, Focusing On Ripple And IOTa
“Cryptocurrencies represent a new frontier in digital finance and their popularity is growing. The decentralized networks for cryptocurrencies, bitcoin being a well-known example, can keep track of digital transactions. They enable value to be exchanged and can give rise to new business models which would otherwise require significant regulatory and institutional commitments." the report states.According to the UN, blockchain and crypto have many use cases. As it is explained in the document:
"For example, a value token called ClimateCoin is being considered as a basis for creating a global market for carbon emissions, allowing peer-to-peer exchange of carbon credits and a direct connection with the Internet of Things. It would then be possible for devices to calculate their own carbon emissions and purchase carbon credits to offset those emissions."The document also focuses on innovation and how it comes from inherent trust, citing that "the innovativeness of this system lies in the way in which the various parts combine to create the trust and guarantees that the traditional financial system derives from institutions and regulation."
Wall Street Investors Need ETNs To Join The Crypto Space: CBOE President
“The power of having that future there is also having an ETN that is more attractive to retail, and then institutions can lay that risk off on the listed futures market. [...] Absent that leg and introducing trackers or notes, I think we will be in this, 'It trades every day, but it is not the story.'”He also said that the main reason why regulators did not approve a Bitcoin exchange-traded product such as the (still-pending) ETF applications is that the regulators cannot protect investors from manipulation on a market. “You answer that question, you get your first ETN,” the president of CBOE concluded.
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