The decision may have been largely expected, but the postponement of the VanEck/SolidX Bitcoin ETF proposal by the U.S. SEC until a final deadline of February 27, 2019, still hit the crypto market hard on Thursday.
After already doing so twice before, the Securities and Exchange Commission (SEC) decided to extend the period for issuing an order approving or disapproving the proposed rule change that would result in America's first Bitcoin ETF a third and final time. The agency wrote in its statement that the "commission finds it appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider this proposed rule change."
Shortly after the SEC's announcement, Bitcoin plunged another 6.5 percent within an hour-and-a-half, hitting a new low for the year and going below $3.5k for the first time since September 2017.
BTC 7/12/18. BLOCKTVMARKET.
Thursday's statement from the SEC came as no surprise according to the director of Digital Assets Strategy at VanEck, Gabor Gurbacs, who tweeted shortly afterwards that the delay was "expected" and added that he sees "lots of good market structure improvements in the markets on pricing, custody, and surveillance" and that "America still wants a Bitcoin ETF."
Note on #Bitcoin #ETF delay:— Gabor Gurbacs (@gaborgurbacs) December 6, 2018
-The delay ‘til 02/27/2019 (final decision date) was expected.
- I see lots of good market structure improvements in the markets on pricing, custody & surveillance.
-America still wants a Bitcoin ETF.
- SEC publication: https://t.co/gth5IKJQ4N pic.twitter.com/q1moX8MJmB
Unlike previously rejected ETF propositions by other companies, the VanEck/SolidX fund would be a physically-backed Bitcoin ETF, will also be insured, and will set the initial price of the fund at $200k.
VanEck and SolidX seem to be leaving no stone unturned in their attempt to receive SEC authorization, meeting just last week with SEC staff, seven weeks after their delegation held discussions with commissioners Hester Peirce and Elad Roisman. Knowing that the staff, including senior members of the likes of William Hinman, director of the Division of Corporation Finance, play such an influential role, they attempted to convince them that the concerns that were raised in the previous postponements of the ETF have been properly addressed.
One of the main points raised by the VanEck/SolidX/CBOE representatives was the comparison between Bitcoin as a commodity and more traditional assets of the likes of gold, silver, and crude oil, who all already have ETFs at market. They claimed that "similar to gold and silver, Bitcoin derives its value as a money substitute," and noted later on that "similar to commodity futures, the spot and futures prices are tightly linked," which, according to their presentation, "is evidence of a well-functioning capital market."
It is unknown what SEC members had to say in response, but later that week, SEC Chairman Jay Clayton went out of his way to address crypto related matters, notably ETFs. "Our job is not to vote. Our job is to present an even playing field on which other people vote," said Clayton, when presented with the possibility that he may be the swing vote the next time an ETF decision is presented to the commission, which is now set to be some time during next February. "That is truly how I've looked at this technology and its effect on the security market. We want to be fair arbitrator of market rules. Our rules have stood the test of time very well and we should not change them to adapt to technology. Technology oughta be able to fit within our rules."