The US Securities and Exchange Commission postponed its decision on whether it would approve a bitcoin exchange-traded fund or ETF, proposed by VanEck and SolidX. This decision is clearly a setback for the entire industry as ETFs are a major part of the product line that supports and facilitates equity trading. In short, when ETFs are allowed, the great access for the underlying product increases. This most recent setback is the third attempt for VanEck to bring an ETF to market.
In this recent shock, there have been shocks before, Bitcoin lost $9 billion in value. After trade to $8,200 a week before, Bitcoin dropped to $6,300 in early hours of New York. The numbers above are according to Classiarius reports.
The proposed ETF would be backed by actual Bitcoin rather than Bitcoin futures. An ETF, a product widely used on Wall Street, is a financial product that tracks the price of an asset and is listed on an exchange. It means that when purchasing the ETF, investors do not buy the actual asset. An ETF on cryptocurrencies would allow institutional investors to move into cryptocurrency investing in a more acceptable and safer way than buying Bitcoin itself on a crypto exchange.
Still, do not give up. The SEC postponed its decision until September 30. Bitcoin recently hit its highest level of market share, as compared to the entire crypto-world of currencies, since December 2017, when it traded near the $20,000 mark.
Clearly, a lot rides on the ETF product model for delivering a well managed and understood Bitcoin to institutional investors. While market participants wait for the next SEC decision on September 30, some firms are looking at everyday use. Starbucks and others on the retail side, and IBM as sell as Citi, and Northern Trust on the financial services side are moving forward to a more acceptable crypto-world of the future.