The past few days had seen the internet rife with rumours that the agency would finally give the green light on a Bitcoin exchange-traded fund after Hester Peirce the agency’s commissioner had appeared at an ETF conference making favourable statements towards the much-awaited product.
The speculation reached a peak on Monday with Bitcoin gaining as much as 17% to break past the $8,000 mark temporarily. But, the hopes of many crypto fans were dashed later on the day after the SEC asked for additional comments on the plan Cboe has to list an ETF from VanEck Associates Corp. and SolidX Partners.
Analyst Believes SEC Should Deny The Product Instead Of Taking Crypto Fans For A Ride
However, the statement seems to have done little to quell Bitcoin’s momentum as the coin has kept most of its gains after the announcement. Speaking to Bloomberg, the regulator noted that the delay doesn’t indicate that the commission has reached any conclusions in regards to any of the issues involved. On the other hand, Cboe is yet to offer a statement on the decision by the SEC.
According to Eric Balchunas, an analyst; “It’s not a big surprise that the SEC is putting off this decision. But given that their issues are with the underlying Bitcoin market, not sure why they just don’t deny it as opposed to stringing along the crypto faithful with false hope.”
This is the second time the SEC has postponed deciding on the fund after doing the same last year. So far, the agency has rejected several ETF proposals including that of Tyler and Cameron Winklevoss in 2018.
According to the agency, several issues need to be addressed by issuers if a Bitcoin ETF is to be approved including; manipulation, lack of sufficient liquidity and custody.