- The SEC has received only one positive Bitcoin ETF feedback since February 2019
- The regulator may not give its nod to any market participant this year
- Bitcoin price volatility and market manipulation have been cited by some commenters as the major reasons why the SEC must not approve a crypto ETF
Judging by the comment letters published by the United States Securities and Exchange Commission (SEC) it appears a good number of crypto observers are now against the approval of a Bitcoin Exchange Traded Fund, and the regulator may not greenlight an ETF anytime soon.
Enthusiasm for Bitcoin ETF has waned significantly
In September 2018, the U.S. SEC received more than 1,400 comment letters concerning the VanEck SolidX Bitcoin ETF filing, of which 99 percent of the feedback were in support of a Bitcoin ETF approval.
However, fast forward to 2019, and it now seems like the crypto bloodbath has made crypto holders less enthusiastic about the investment vehicle.
Since February 2019, the U.S. financial watchdog has received only seven feedback, of which six of the comment letters are negative.
On March 6, 2019, one Dina Pinto explicitly stated in their comment letter that bitcoin is not yet matured enough to serve as a foundation on which serious investment vehicles could be built.
“It is volatile, manipulated and has no real use case,” argued Pinta, adding “I can see a lot of people getting hurt both financially and in other ways by you accepting this proposal. It is in my humble opinion that this proposal be rejected.”
Wait and see
Commenter D. Barnwell has urged the SEC to observe the digital asset a little longer to find out whether bitcoin is worthy of becoming a financial product. Barnwell also argues that the focus of the regulators should be on the underlying distributed ledger technology (DLT) instead of cryptocurrency. In his words:
“I would like to voice my disapproval of this Bitcoin ETP and would as the SEC to take a much longer time horizon to take a ‘watch and wait approach’ to see if Bitcoin is worthy of becoming a financial product with all the positives and drawdowns it entails. The genuine game changer is the underlying blockchain technology, not the cryptocurrency. And to use DLT, one does not need to have a financial product powered by cryptocurrency.”
The crypto space doesn’t need an ETF to survive
On the other hand, a Bitcoin ETF may not be necessary at this point.
What the entire cryptocurrency ecosystem needs, for now, is amenable regulations across all jurisdictions in order to have a crypto market that is devoid of unlawful practices such as market manipulation, money laundering, and others.
Once the regulatory uncertainties have been completely taken care of, other aspects of the industry will fall into place.
Despite the seemingly unregulated and volatile nature of cryptoassets, it’s worth noting that more firms and individuals keep joining the crypto movement with each passing day.
On March 19, 2019, Blockchain Reporter informed that six international banks have announced plans to launch their digital assets using the IBM payments network called World-Wire.