What SECs Rejection of the Bitcoin ETF Means

What SECs Rejection of the Bitcoin ETF Means

What SECs Rejection of the Bitcoin ETF Means

The cryptocurrency's surge comes as the U.S. Securities and Exchange Commission (SEC) is considering approving the first bitcoin-based exchange-traded fund (ETF), a type of publicly traded investment fund.

Citing the possibility of fraud, the agency turned down a proposal to alter stock exchange rules to allow the creation of an exchange traded fund (ETF) for bitcoin.

The price of bitcoin swung widely on Friday alone as investors anxious about the fate of the ETF. It last traded down 7.8 percent to US$1098. This ETF, the Winklevoss Bitcoin Trust meant to have been listed as COIN, would have let institutional investors invest in bitcoin, without actually needing to buy or hold the digital currency themselves; these would be held by a custodian, Gemini.

"It's a very unilaterally controlled process there", Josiah Hernandez, chief strategy officer at Bitcoin ATM company Coinsource, told The Post.

The irrepressible Winklevoss twins, known for having sued Mark Zuckerberg over the idea for Facebook, have suffered a setback from federal regulators in their push to expand the use of bitcoin to a wider universe of investors. "Bitcoin is an area of the market that's not well-correlated with stocks, bonds or even other currencies", he says.

"The commission notes that Bitcoin is still in the relatively early stages of its development and that, over time, regulated Bitcoin-related markets of significant size may develop".

It should be noted that on 3 March, prices of bitcoin hit $1300 levels - more than the price of gold - in anticipation of an approval for ETF from the SEC.

"We are determined to see it through". Bitcoins transactions must be approved individually in the blockchain network, and buyers are already victims of long wait times to get transactions approved. Among them, he listed light trading volume, excessive hoarding, extreme price volatility, the difficulty of selling large blocks of bitcoin quickly, high risk of bankruptcy and market manipulation. "How do we develop well-capitalized and regulated markets in the USA and Europe if financial innovators aren't allowed to bring products to market that grow domestic demand for digital currencies like Bitcoin?" "We agree with the SEC that regulation and oversight are important to the health of any marketplace and the safety of all investors", Tyler Winklevoss said in a statement.

SolidX Partners, a United States technology company that provides blockchain services, also filed its ETF application previous year. The total value of all outstanding bitcoins has dropped to $16.5 billion.

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