Bitcoin ETF Remains Delayed Over Two Key SEC Concerns

Bitcoin exchange-traded funds (ETFs) are probably one of the most anticipated products out there.

They were first suggested a year ago and some market analysts have suggested that it was Bitcoin ETF hype that helped fuel the incredible rise of Bitcoin in 2018. However, when the Securities and Exchange Commission (SEC) decided to reject the applications that sought Bitcoin ETF approval, the value of Bitcoin also went down.

Though many companies have been consistently applying to receive a Bitcoin ETF approval, they have not met with any success.

Big names like Van Eck, SolidX, and Bitwise Asset Management have thrown their hats in the ring but the SEC has continued to reject them and delay their decisions on some applications. 

Currently, there are three Bitcoin ETF applications pending. They come from Bitwise, Wilshire Phoenix, and the team of VanEck and SolidX. All three are waiting for approval from the SEC which they expected to receive in early August.

However, the SEC decided to delay their decision until October 18, 2019. A decision on this date will be most likely for two applications as the SEC cannot delay for more than 240 days on a decision. BitWise and the VanEck/SolidX team will know their fate but Wilshire Phoenix may face another delay. 

Bloomberg Markets and Finance

Why the Wait?

The big question on the mind of most traders is what is taking the SEC so long. Adding Bitcoin ETFs could only be a benefit to the market but the SEC is still hesitating on pulling the trigger. However, the delay could actually a good sign. This may mean that the commission is actually considering an approval but there are factors that are slowing things down. If the SEC really didn’t like Bitcoin ETFs, they would have refused these applications outright.

The problem with the delay means there are several issues that need to be ironed out. According to SEC Chairman Jay Clayton, the SEC has two big concerns. One of these is the issue of custody. Normally, when traders exchange funds and assets, they can demonstrably show that they have full control over it. This can be difficult when talking about digital property. They can be easily hacked and stolen away from someone. 

The second problem is market manipulation. The Bitcoin market has long been under the suspicion of being easily manipulated. The normal stock market has regulations that stop such manipulation from happening while Bitcoin exchanges can seem like the Wild West. Analysts agree that until there is a way to guarantee that there is no Bitcoin market manipulation, bitcoin ETFs may not become a reality!