SEC Said To Decide On Bitcoin ETF By Friday

Tyler Durden's picture

Among the big drivers behind the recent move higher in the price of bitcoin - in addition to the traditional "capital outflow" demand out of China - has been widespread hope that the SEC will approve the first bitcoin ETF. And contrary to our report from January that such a decision, and ETF, will be delayed substantially, today Coindesk writes that according to its sources, the ETF decision is expected, either affirming or denying, by Friday.

The SEC has a March 11th internal deadline, Coindesk reported, to decide on the proposed rule change that would clear the way for the ETF, which would be the first of its kind. However, as the 11th falls on a Saturday, that decision will come before that date, "potentially before Friday", the source said. The decision would cap a more than three-year period since investors Cameron and Tyler Winklevoss first filed with the SEC in mid-2013.

In case of a favorable outcome, some analysts and traders have speculated that bitcoin markets could rise as a result, although considering the recent ramp in BTC's price in recent weeks, the news may have been priced in and holders may instead sell the news. Bitcoin's price has approached $1,300 in recent sessions, rising above $1,290 on March 3rd. However, the price has kept sliding, eventually experiencing a sharp drop on Tuesday as reported earlier on fresh concerns about China, when BTC briefly traded back under the price of one ounce of gold.

On the other hand, analysts have argued that, should the SEC reject the rule change that would allow the Bats Global Exchange to list the ETF, bitcoin's price could be negatively affected. Phil Bak, who was previously a New York Stock Exchange managing director and currently serves as CEO for ETF issuer ACSI Funds, told CoinDesk that, generally, the SEC seeks to avoid the appearance of "publicly rejecting an ETF." He went on to argue that, if the agency didn't plan on approving one of these funds, it would likely ask for the filing to be pulled ahead of any final decision. Yet according to Bak, the lack of such a pullback so close to the deadline could be driven by other factors specific to the bitcoin ETF.

"In this case, the government agency may want to show the world it is unsure about bitcoin. Alternatively, it could also be that the advocates want to support it to the end and let this proposed fund get its day in court, rejection or not" Bak explained.

Others believe the odds of either outcome are about even: Arthur Hayes, co-founder and CEO of exchange platform BitMEX, said "I have heard good arguments for and against the ETF being approved. At this point it is a coin toss." Hayes' exchange is home to an ETF-tied prediction market, where traders can essentially bet on the outcome of the decision, and that has seen significant fluctuations over the past month. At times, traders have given the fund estimated chances of between 2% and 70%, depending on the day. At press time, the prediction market shows a roughly 50% estimated chance of approval.

Charles Hayter, co-founder and CEO of CryptoCompare, offered similar sentiment, stating that the fund's odds of receiving approval are "more than likely plucked out of the air on this one".

Those close to the industry aren't the only ones comparing the SEC decision to a coin flip. Bloomberg's Eric Balchunas has similarly argued that the ETF has about a 50-50 chance of receiving approval.

While there is much money to be made (or lost) depending which way the SEC rules, the waiting is almost over.... or perhaps not.

Even if the Coinbase source is accurate, and the SEC has an approaching deadling, one analyst has warned that those hoping for a conclusion to the years-long process might not get an answer until after that date. Jeff Bishop, co-founder of investor message board platform RagingBull.com and ETF expert, speculated that the SEC could punt its decision further past the 11th, particularly in light of recent price gains.

"I have the feeling they will find a way to delay this even more though. With bitcoin at all-time highs and the SEC having a terrible record for allowing new ETFs to come to market at absolute tops, they will likely push back on this until things cool a bit," he said.

For his part, Bishop believes the ETF should be approved. "It should be up to investors to decide the true price of bitcoin. The more liquidity and options [there are] to trade it, the more transparent and accurate the pricing will be."

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Croesus's picture

And now, here's Xythras, with a word from his blog, Accredited Times 2!

Followed by a plug for Local Bitcoins...from the inimitable Fonestar!

City_Of_Champyinz's picture

Don't forget about the local bitcoins schmuck...

Croesus's picture

Haha..great minds, my friend.

38BWD22's picture

 

 

Gold & Bearing Guy (moi) thinks that there may be a nice pop if the ETF is approved.

On the other hand, BTC prices may get crushed if not...

 

Mr. Universe's picture

Am I the only one to think it's ironic that an ETF is being set up for made up electronic "bits"?

This Might Hurt's picture

Fingers crossed it gets rejected, I would like another buying opportunity. Bitcoin compliments my precious metals in my crisis portfolio nicely as described in the video below.

http://www.themonetaryreset.com/2017/02/complimentary-precious-metals-an...

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) This Might Hurt Mar 7, 2017 9:09 PM

Central banks of the world trying to get their Bitcoin MONKEY HAMMER.

MASSIVE selloffs at YUGE losses regularly.  They'll pound away regularly, just like SLV/GLD.

philipat's picture

Perhaps someone could explain WHY anyone would want to buy BTC via an ETF, paying Fees IN/OUT and yearly? And you can't use the BTC in an ETF so it becomes "dead money". Surely, if you want to buy BTC, you buy BTC? And having your own BTC is completely secure with no storage charges. So, I can see no advantages whatsoever, other than for the purposes of the manipulators, for buying a BTC ETF. Perhaps I am missing something?

Paper Boy's picture
Paper Boy (not verified) philipat Mar 7, 2017 9:31 PM

I think a lot of it has to do with there's a lot of people who don't have any clue of how to get Bitcoin but they want to get in on the price action. Of course, most of them will be left with nothing as they will own no real Bitcoin.

Notveryamused's picture

I think certain types of funds are prohibited from investing in Bitcoin unless it's approved so it opens up a large new market.

prime american's picture
prime american (not verified) Notveryamused Mar 8, 2017 1:59 AM

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

Mustafa Kemal's picture

"Fingers crossed it gets rejected, I would like another buying opportunity. Bitcoin compliments my precious metals in my crisis portfolio"

Ditto on both accounts here. I dont want an ETF for the same reason I look forward to the disappearance of the comex for Au. If the ETF gets approved on the other hand i suspect large increases. On the other hand I expect it to fail. Good. If that happens, I suspect a drop, which I will buy, and then expect a continued surge upwards.

Paper Boy's picture
Paper Boy (not verified) Mr. Universe Mar 7, 2017 9:02 PM

Buy (real) Bitcoin!

 

https://localbitcoins.com

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Paper Boy Mar 7, 2017 9:13 PM

Dude, why the name change?  Did your Bitcoinista tactics get you banned?  The pictures you were taking through the window of your naked neighbor (you never did say male/female/other) cause you problems?

Paper Boy's picture

She was female but not very hot. Blackmailed her real good.

Sh3epdog's picture

What is wrong with you..

Raffie's picture

U need to settle down.

Paper Boy's picture
Paper Boy (not verified) Raffie Mar 7, 2017 9:29 PM

Sorry, I am taking 13mg of Bitavin(TM).

Raffie's picture

Where is Parker with your FAKE NEWS?

shamus001's picture

Not ironic at all... the plan is to create an ETF, then print fake $ for free and SHORT THE HELL OUTA IT!

Once able to Naked Short Sell something they don't really own (like gold) they can take the downside heavily with printed fiat currencies and suppress it- in effect CONTROL THE MARKET!

Paper Boy's picture
Paper Boy (not verified) 38BWD22 Mar 7, 2017 9:01 PM

A Bitcoin ETF is teh stupidest thing ever...

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Paper Boy Mar 7, 2017 9:11 PM

No, it adds the always exciting Monkey Hammer to the Bitcoin realm!  Excitement weekly!  Even daily at times.

TwelveOhOne's picture

A Bitcoin EFT is similar to my thought of purchasing wikileaksvault7.com for ten bucks and hosting the content of the drop there -- it allows many more people to participate than those who understand the technical part of it.

Paper Boy's picture
Paper Boy (not verified) TwelveOhOne Mar 7, 2017 9:54 PM

Oh gawd... you mean there's people who can't even unzip a .rar or .7z file?

TwelveOhOne's picture

Plenty.  That's not the only issue, it's teaching grandma to Torrent as well.  Easier access means more access, like Eric Raymond's statement (which he termed Linus' Law in honor of Linus Torvalds, who created Linux), "given enough eyeballs, all bugs are shallow." https://en.wikipedia.org/wiki/Linus's_Law

jcaz's picture

Excellent- then the SEC can focus on that heroin ETF.....

mvsjcl's picture

Is there anything these motherfuckers don't want to control?

SILVERGEDDON's picture

Tits up for Bitcoin, and the local Paperboi pimp in three days, huh ?

I can hear the wailing and gnashing of teeth already.

Fonestar is rolling around in his grave.

Zombie Satoshi, anyone ? 

Takeaction2's picture
Takeaction2 (not verified) Croesus Mar 7, 2017 8:55 PM

So....as it goes.  Bitcoin gains some traction...time to create a paper ETF to Monkey Hammer it when needed.  We here at ZH see it so clearly.  Not even surprised...R U??

38BWD22's picture

 

 

THAT is an excellent point I never even considered...

+$1240!

Davy Crockett's picture

Exactly.  We see how, when physical gold demand was getting away from them, they created paper gold.  This has the effect of shifting a huge amount of the demand away from the actual commodity, to the derivitive product, which can be printed in unlimited supply.  It also gives them a tool to use for price manipulation.

The bitcoin guys are crazy to want this ETF  to occur.  If it occurs, bitcoin will suffer decades of manipulation, just like gold has.

Notveryamused's picture

Gold is physical so it's difficult & expensive for large players to take delivery & verify holdings. With Bitcoin proof of holdings is much easier to verify & if you ever are concerned it's easy and cheap to take delivery.

Archibald Buttle's picture

not if they can settle in FRNs.

GoinFawr's picture

Call me cynical TA2, but no, I am not even slightly surprised.

Abitcoinbrain's picture

print money and short bitcoin!

Mustafa Kemal's picture

".time to create a paper ETF to Monkey Hammer it when needed."

It is for this reason that I really hope it fails. 

Bollockinell's picture

Am I correct in thinking that if an ETF is granted Bitcoin's status will change from currency to commodity?

Paper Boy's picture
Paper Boy (not verified) Croesus Mar 7, 2017 9:00 PM

OMG!  SATOSHI WE LOVE YOU!!

auricle's picture

what the SEC is really wanting is to leash bitcoin under the CFTC so they can short the shit out of it like every other commodity.

Keyser's picture

Exactly, just like the silver and gold ETF's... They want to control bitcoin, because they can... 

Notveryamused's picture

You can control a physical currency with a digital derivative until physical demand overwhelms supply however you can't control a digital currency with a digital derivative because the market will move away from the ETF in line with Greshams law - the ETF will very quickly trade at a discount - as soon as there are any observable issues because there's less friction.

Kefeer's picture

Nothing like underestimating the power of darkness, the ones who came up with the idea in the first place.

Bollockinell's picture

That's my opinion too but it begs the question, why did the Winkelvoss twins believe this was the way to go? After all, they are totally invested in the future of Bitcoin so surely they would have realized the downside of an ETF.

knukles's picture

In accordance with new DC tradition, they'll make the politically astute (read $) decision and of course, release it about 10:45 pm on Friday.
Then of course, GS will issue the first two BitCoin ETF's on Monday morning. 
The first ETF will invest in Bitcoin, lend coins, re-hypothicate said coins as the custodian/trustee will be in The City, and in general, own fuck all nothing but somebody else's warehouse receipts.  (Just like LMBA regs)
The second one will "speculate" in the BitCoin universe, and it willl be called "2Bit"Coin; it will do everything and anything even remotely connected through time and space with BitCoin.  Kinda like those old "blind pools" from Bubble #1.0

Paper BitCoin.

 

jcaz's picture

LOL- blind pools....  I still have a few of those in stock....

Correct on your logic-  Bitcoin is toast, ironically bound by the forces it thought it circumvented-

Silly rabbits.

nmewn's picture

And the inverse?