CNBC reported on September 4 that according to the founder of the crypto payment start-up Abra, Bill Barhydt, the reason that the US Security and Exchange Commission (SEC) has denied the cryptocurrency Exchange Traded Funds (ETF) was because the applicants don’t fit the archetypes the SEC is looking for.
Barhydt expressed his thoughts about the SEC’s problems with people filing their application to the CNBC’s “Squawk Box Europe”. He mentioned that the SEC is not used to approving such requests. He was an ex-employee at the Goldman Sachs, but it is unlikely that you would notice it now looking at how he is dressed. This predicament might cause his ETF to get rejected if he ever plans on attending an SEC meeting to apply for one.
In July 2018, the SEC rejected a fund proposed by The Winklevoss Twins, Cameron Winklevoss and Tyler Winklevoss. In August 2018, the SEC postponed a decision about whether or not to approve the VanEck and Solid X’s proposed ETF to September 2018. The SEC also rejected several bitcoin ETFs this year.
Bitcoin became breaking news in late 2017 when the price increased to an all-time high around US$ 20,000, but it has lost a significant amount of gains, and at the time of writing, a single bitcoin equals US$ 7,162.98.
According to CNBC, cryptocurrencies analysts and market experts believe that crypto investment in the space is a significant step forward. This development can transform cryptocurrencies into a well-established industry vertical, trusted and approved by every financial institution. However, the volatile prices that are probably putting off large financial firms and the downhill descend in the costs over the last year has lowered their optimism significantly as to whether the institutional involvement should happen sooner or later.
Barhydt said that to receive approval for an ETF; there should be an applicant who has to fit the mould of whoever the SEC is used to approving. He added that a trusted financial organisation has a better chance of getting approval than a start-up or a relatively unknown firm. On top of that, he expressed his confidence in it happening next year as there is an excessive demand for it.
Pantera Capital CEO Dan Morehead said that a bitcoin ETF would take a long time because the adoption of cryptocurrencies is still in their early stages. He further added that the most recent SEC approved asset for ETF certification was copper, a metal that existed on the earth for many millennia.
A few people believe that a cash-redeemed bitcoin investment instrument like an ETF is the key to opening the bitcoin market to large-scale entry, especially to the institutional investors who have not yet jumped aboard the bitcoin bandwagon. A Bitcoin ETF could be capable of helping bitcoin, and the wider cryptomarket achieve a valuation that only mass adoption could otherwise obtain, according to CCN Report.