It’s no surprise that Bitcoin – and cryptocurrencies in general – has suffered since the big blowup in late 2017. Traders, new investors, and onlookers all expect way too much of the world’s first digital asset, one that could be saved by the approval of a Bitcoin ETF. Remember, Bitcoin went from less than $1k all the way to $20k in a strikingly short time.
Since then, the asset has fallen steadily in price to an average of $3k, notably higher than the original price of $1k, to be fair. Part of this is thanks to a lack of regulation for U.S. officials, a failure to upgrade networks, few big-time investors, and more. It turns out that prices are going to be down for a while longer.
Because of the recent government shutdown in the United States, the cryptocurrency market has hit a bit of a standstill. This has lead to the withdrawal of a Bitcoin exchange-traded-fund (ETF) proposal made by CBOE BZX, a cryptocurrency exchange. Unfortunately, this delay will prevent more investors from entering the world of digital assets.
A Bitcoin ETF would allow the currency to be traded on a stock exchange just like a traditional stock. This provides legitimacy and security – something investors have been waiting for before getting involved. According to a recent Bitwise survey, 58% of investors said they’re waiting for Bitcoin ETFs, as that is how they’d prefer to invest in the market.
Read: What is a Bitcoin ETF?
The government has been hard on any Bitcoin ETF proposals made. The CBOE proposal is “backed by VanEck – an investment firm – and SolidX – a financial services provider,”. Governments have been against passing such an idea because digital assets, especially Bitcoin, are incredibly susceptible to market manipulation and volatility.
The United States Securities and Exchange Commission (SEC) announced the withdrawal in a recent filing. They attributed the cause to the shutdown of the U.S. government. Fortunately, this change didn’t affect Bitcoin’s price much – though it did see a slight drop – and it is sitting close to the $3.5k price point it has been at most of January.
Looking to the Future
Despite CBOE’s withdrawal, the exchange is already planning its path to reapplication. Part of their decision was due to all of the SEC members who just weren’t at work due to the shutdown. Some of these officials were fans of the proposal, while others aren’t that into the idea. That’s not to mention that the decision deadline was coming soon anyways
CEO of VanEck, Jan van Eck, commented on the decision via CNBC:
“The shutdown affected the U.S SEC, we were engaged in discussions with the SEC regarding Bitcoin-related issues, market manipulation, prices, custody, and that had to stop. So, rather than trying to sleep through or something, we just had to withdraw the application and we will re-file and reengage in the discussions when the SEC gets going again.”
In an additional statement, CBOE lamented the terrible timing of the deadline and the governmental shutdown. They aren’t too worried, however, thanks to the ability to reapply. The group looks forward to speaking with the United States SEC soon enough.
Mati Greenspan, the senior market analyst at eToro, emailed clients regarding the proposal. He claimed that CBOE’s idea had a “very slim chance” of seeing approval. This is, in part, due to SEC chairman Jay Clayton’s comments on the market. Clayton claims that the market as a whole is too immature for a Bitcoin ETF. He attributes this to the low prices throughout the past few years alongside all of the volatility seen since the big blow up from late 2017.
Regardless, the approval of Bitcoin ETFs might be precisely what the market needs to right itself. With such interest in digital assets, increasing accessibility is a fantastic way to get more people involved in the market.