May 2019 was expected to be all about the Bitcoin ETF, but the way the markets moved, it was anything but. The king coin’s ascendance over $7,000 and then $8,000 prior to Consensus 2019, a conference touting its own pump, the monumental ETF took a backseat.
Earlier in the week, the US Securities and Exchange Commission [SEC] confirmed the delay of an application for the ETF from Bitwise Asset Management and NYSE Arca. Given that this delay to October of this year was more than expected, what wasn’t foreseen was the lack of immediate decision on the other proposal, the one by VanEck and the CBOE.
The two proposals which aim to provide the infrastructure for a publicly traded Bitcoin product, and aim to bring in capital inflow, both retail and institutional into decentralized currency often are at a common receiving end from the regulators. However, the lack of decision on the second proposal could point to a telling tale.
Jake Chervinsky, a member of the litigation team at Kobre & Kim who has often contributed his legal expertise on the ETF issue, stated that the lack of concurrent delay to the two proposals is “unusual” and “curious.” Based on a ‘normal’ scenario, the delay to bot proposals would be handed out in one go.
“The SEC delayed the Bitwise bitcoin ETF two days ago but still hasn’t made a decision on VanEck. This is unusual: the SEC would normally handle both ETFs at once.
The VanEck deadline is next Tuesday. I still think delay is overwhelmingly likely, but the timing has me curious. 👀”
Commenting on the prospects of the VanEck-ETF decision, given past delays and the Bitwise postponement, Chervinsky veered away from a similar verdict being handed out to VanEck. Because of the separate decision by the SEC, VanEck’s ETF proposal might be “rejected,” according to the lawyer.
Based on his assumptions, the SEC will take the “maximum time allowed by law” to approve the Bitcoin ETF, which for Bitwise-NYSE Arca is on October 13. He added that there is a “14%” chance of a denial, with the odds pointing to a delay, and a very small sliver of “1%” of the ETF being approved.
His follow-up tweet stated:
“I think there’s a chance it gets rejected. 😶 I don’t think the SEC will approve the first bitcoin ETF without taking the maximum time allowed by law, so if it’s not a delay, it’s probably a denial. At this point, I’d put the odds at:
– Delay, 85%
– Deny, 14%
– Approve, 1%”
Despite the number of proposals tabled, the final decision is with the top officials of the SEC, who have previously questioned the market manipulation and volatility of the cryptocurrency market. Jay Clayton, Chairman of the regulatory body voiced the same, prior to the earlier delay in March.
In a recent Crypto Trader interview at Consensus 2019, Hester Peirce, a Commissioner at the SEC stated that she was “optimistic” on the BTC ETF but cautioned the industry to not “hold its breath,” because market manipulation is still rampant.
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