SEC Pours Cold Water on Prospect of Bitcoin ETFs Regulator warns Wall Street not to look for loopholes to offer funds tracking bitcoin The SEC questioned how bitcoin’s volatility would fit with funds that must calculate a fair market price for their portfolio at the end of every trading day and allow investors to easily cash out their shares. PHOTO: ANDREW HARNIK/ASSOCIATED PRESS By Dave Michaels and Asjylyn Loder Updated Jan. 19, 2018 7:42 a.m. ET 10 COMMENTS Wall Street’s top regulator on Thursday all but shut the door to approving exchange-traded funds that hold bitcoin and other cryptocurrencies, questioning whether the products could comply with rules meant to protect mom-and-pop investors. The Securities and Exchange Commission outlined its views in a letter to two Wall Street trade groups whose members envision the profits that could flow from selling exposure to bitcoin through popular investment vehicles such as ETFs and mutual funds. The SEC questioned how bitcoin’s volatility and potential illiquidity would fit with funds that must calculate a fair market price for their portfolio at the end of every trading day and allow investors to easily cash out their shares. “Until the questions identified above can be addressed satisfactorily, we do not believe that it is appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products,” the SEC’s director of investment management, Dalia Blass, wrote in the letter made public Thursday. Several ETF issuers have been racing to launch the first bitcoin fund amid a speculative frenzy for digital currencies, but the SEC has so far been skeptical. The agency has also expressed reservations about initial coin offerings, saying that many ICOs, in which a firm raises money from investors in exchange for a new coin, are securities sales that should comply with its investor protection rules. Last year, the SEC rejected two proposed ETFs that would directly own bitcoin, including one from Cameron and Tyler Winklevoss, arguing that the global market for the digital currency wasn’t transparent enough to support sufficient oversight. Some fund companies hoped that the SEC might relent after two Chicago exchanges late last year launched futures contracts on bitcoin. Those contracts are regulated by the Commodity Futures Trading Commission, a smaller federal agency whose rules allow Wall Street to more easily market new products. The SEC’s order in the Winklevoss case in March had indicated that a liquid and regulated futures contract could strengthen the case to allow bitcoin ETFs. But under its new chairman, Jay Clayton, the SEC has taken a more hawkish stance toward products and conduct that could blow up and hurt retail investors. Wall Street’s hopes for the SEC’s approval were dashed last week when the regulator asked several firms to withdraw applications to launch ETFs backed by bitcoin futures. The SEC’s letter outlined a series of questions that ETF and mutual-fund sponsors would need to answer to get the agency’s blessing in the future for crypto funds. But it warned them not to look for loopholes that could allow them to offer new funds that track bitcoin or bitcoin futures. U.S. law allows mutual-fund companies with existing regulatory approvals to introduce new funds with minimal oversight, but the SEC warned it wouldn’t be pleased if that avenue was tried to launch bitcoin ETFs. “We would view that action unfavorably and would consider actions necessary or appropriate to protect Main Street investors, including recommending a stop order to the commission,” Ms. Blass wrote. Write to Dave Michaels at dave.michaels@wsj.com and Asjylyn Loder at asjylyn.loder@wsj.com Bitcoin vs. Regulators: Who Will Win? As bitcoin has emerged from the underground world of nerds and criminals to become a mainstream investment, the risk of hacks and scandals has also blossomed. What's a government to do? The WSJ's Steven Russolillo travels the world (sort of) to see how regulators are responding to the remarkable rise of cryptocurrencies. Video: Sharon Shi and Crystal Tai
Real value of a tulip vs. what people in Holland were willing to pay for one in 1637...who eventually won?
Another Trump appointment. But really, I'm not sure I care as crypto has been doing fine without ETFs.
As always, the market. Because tulips were eventually evaluated correctly and the same evaluation will occur with cryptos(only the opposite will occur and they will be increasingly used). But this is just my opinion, just as yours is, in other words: time and the market will tell what they're worth, regardless of what you and I think. But your comparison is nonsense. Mine was Regulators(The Inquisition) and Bitcoin(Galileo and his heliocentric theory). Meaning that government (the church at the time) is always trying to stop progress and they succeed in slowing it down, but eventually the market finds a way to break through. Despite all attempts at trying to deny the heliocentrism, today only an idiot would still say the Earth is the center of everything.
look, it's clear for the last 5000 years we have just been fooling around, but now its time to get serious and coin. hodl. as u can c , I issued my own coin and now proudly have it as my avatar