2018 has seen the production of many ideas for a Bitcoin Exchange Traded Fund (ETF) that could be established to make institutional investment easier for large companies and corporations. The notion of a Bitcoin ETF is that it would make Bitcoin investment more mature and more accessible to big companies, all of whom would no doubt put a lot of money into Bitcoin, should investment be made a little safer for them. This, in essence is exactly what the Bitcoin ETF aims to achieve.
What we have seen through 2018 is a number of applications to open a Bitcoin ETF filed with the United States Securities and Exchange Commission (SEC). These applications have been held for review by the SEC for a number of months, as the SEC cannot decide on the grounds through which they should approve an ETF. This is a heavily unregulated industry and therefore, the SEC don’t have a rule book to refer to, therefore the applications must be reviewed by people, over a long period of time to ensure the SEC don’t mess it up.
The most prominent ETF application currently comes from VanEck, a New York based Investment Management Company who work with institutional investors on a daily basis. Just yesterday, the SEC announced that they would be further delaying the decision for this application, pushing the deadline back to the 27th of February 2019. This is important, given that a final decision was set to be made in August 2018, before being pushed back to the end of September 2018, and then, December 2018.
The official SEC announcement reads as following:
“Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Designation of a Longer Period for Commission Action on Proceedings to Determine Whether to Approve or Disapprove a Proposed Rule Change to List and Trade Shares of SolidX Bitcoin Shares Issued by the VanEck SolidX Bitcoin Trust”
“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. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act, designates February 27, 2019, as the date by which the Commission shall either approve or disapprove the proposed rule change (File No. SR-CboeBZX-2018-040). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.”
The SEC seem to be getting into the habit of constantly pushing these deadlines back, which almost always causes the markets to plummet in the process. Is there something more concerning at play here, or are the SEC genuinely just struggling to come to an agreement?