What SECs Rejection of the Bitcoin ETF Means
Bitcoin is having a rough day.
Around 4 p.m., the Securities and Exchange Commission dealt the digital currency a major blow, denying the application for the much anticipated Winklevoss Bitcoin Trust ETF. For the founders of the ETF, The Winklevoss Twins, the denial brings about the close of an almost four-year attempt at a digital currency ETF.
In brief, the SEC has decided that Bitcoin, as a currency, is too susceptible to fraud because of a lack of regulation.
The announcement has already sent the price of Bitcoin tumbling from $1,300 to $1,100. The total value of all outstanding bitcoins has dropped to $16.5 billion.
What was the purpose of ETF? Well, it would have served as a common stock fund, allowing investors to gain exposure to Bitcoin without a personal wallet. It wouldn't have let investors spend Bitcoin, but it would have enabled them to buy and sell the digital currency at market price.
Supporters of Bitcoin were watching the SEC with baited breath – even though many analysts were predicting a chance of approval below 25%.
The digital currency could have doubled in price if the ETF was approved according to some analysts...
Yet this move from the SEC doesn't mean total doom for Bitcoin. The cryptocurrency has gained a lot of momentum in the last two years and there are currently two other Bitcoin ETF approvals submitted to the SEC.
Those proposals are both slightly different – increasing the chance that one will get approved.
For long term Bitcoin investors, this could be the perfect opportunity to buy the dip.