Bitcoin continues plunging after Winklevoss ETF gets a ‘NO’ from SEC

Bitcoin continues plunging after Winklevoss ETF gets a ‘NO’ from SEC

The world’s most valuable cryptocurrency, Bitcoin has nosedived from N2.9 million to N2.7 million after the US SEC declined to approve Winklevoss exchange-traded funds, ETF.

According to Investopedia, an EFT or exchange-traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange.

ETFs experience price changes throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors.

So basically, the Winklevoss twins who go by the name Tyler and Cameron had partnered with the CBOE to list an exchange-traded fund tracking the prices of Bitcoin.
Quoted by Bloomberg, the SEC it isn’t convinced that trading of the world’s largest virtual token has adequate surveillance and that Cboe Global Markets Inc., which would have listed the Bitcoin ETF, failed to show that the underlying market was “resistant to manipulation.” The ETF’s value would have been tied to trading on the Winklevoss twins’ Gemini exchange.

In summary, the SEC was skeptical that Bitcoin exchanges cannot assure the fidelity of Bitcoin price data the ETF will be tracking.

The SEC was majorly concerned about the anonymity surrounding how Bitcoin is traded on various exchanges:

“The record before the commission indicates that a substantial majority of Bitcoin trading occurs on unregulated venues overseas that are relatively new and that, generally, appear to trade only digital assets,” the SEC said in its filing. “Regulated Bitcoin-related markets are in the early stages of their development.”

The Gemini exchange is touted by the Winklevoss twins as a ‘regulated’ exchange, which should have erased the concerns of the SEC since the platform is opened to the commission’s regulations.

Commenting on the rejection, Cboe President and Chief Operating Officer Chris Concannon said the exchange took market stability and security “very seriously.”

“Given U.S. investors are clearly already accessing these unregistered financial products, we also believe that investors are better served by products traded on a regulated securities market and protected by robust securities laws,” he said in a statement. Cboe would continue to work with the SEC on winning approval for a crypto ETF, Concannon added.

“Despite today’s ruling, we look forward to continuing to work with the SEC and remain deeply committed to bringing a regulated Bitcoin ETF to market and building the future of money,” Cameron Winklevoss said in a statement.

The SEC, however, said it is still looking at applications of other ETFs and it is looking at re-examining the application while noting that it fear digital currencies are not mature for an ETF.