The last six months have been quite a saga of false starts, fits and steady grinds when it comes to the effort to get the U.S. Securities and Exchange Commission to approve a Bitcoin exchange traded fund.
We’ve been incessantly reporting on how an exchange traded fund or ETF would help ‘bit players’ (no pun intended) get into the Bitcoin game – how it would help with liquidity and minimum buy-in and all sorts of things, and probably boost Bitcoin markets considerably.
Unfortunately, no Bitcoin ETF approval was forthcoming. The SEC kicked the can down the road repeatedly, and most recently, delayed a ruling until February.
Now, today, we have breaking news that that February ruling is never going to happen.
The parties behind the VanEck proposal have now withdrawn it, according to coverage in Cryptopotato today.
“While there were many Bitcoin ETF requests submitted for approval in the last year that got rejected, one application, in particular, submitted by CBOE and backed by VanEck and SolidX, attracted a lot of attention, and after many delays, the SEC was supposed to provide their decision till February 27th, 2019,” writes Ali Raza. “However, a twist occurred two days ago, on January 22nd, when the application was withdrawn by the very entities that filed it in the first place … the decision came as a surprise.”
Raza cites an interesting reason for the eventual withdrawal – the U.S. government shutdown that has been dragging on for over a month and threatens to bankrupt or financially destroy 800,000 federal workers.
Aside from all of the other big market news attached to the shutdown and the political gamesmanship going on over economic insecurities, this decision to withdraw the bitcoin ETF proposal is big on its own.
“(The proposal’s withdrawal deals) a blow to those who’d hoped the long-awaited bitcoin ETF would bring a fresh round of investment into the stagnating market,” writes Billy Bambrough in a Forbes article covering the brand new development. “The decision to withdraw the application amid the U.S. government shutdown, announced in an SEC filing, saw the Bitcoin price dip slightly though it remains around the $3,500 it’s been trading at since early January.”
However, Raza and others suggest that it’s not really a done deal. Instead, they indicate that the withdrawal is strategic and temporary – that when the U.S. federal government gets its house in order and gets back to work, another proposal will be forthcoming.
As many pundits and analysts wring their hands, saying it never should have come to this, others are thinking beyond the shutdown to what’s going to happen when the federal doors reopen. A Bitcoin ETF in 2019 is certainly not out of the realm of possibility, and it’s a good idea for traders to really stay apprised of developments to know whether they and others will have access to a liquid, market day-trading bitcoin platform.