Big Bitcoin ETF Decision Coming Today, Or Maybe Not

March 10, 2017

[Editor's note - Update: SEC Rejects Bitcoin ETF

The much-awaited Securities and Exchange Commission decision on whether to approve or disapprove the Winklevoss Bitcoin ETF (COIN) may not actually come until Monday, March 13.

The deadline to rule on this ETF is officially tomorrow, but there’s a clause in the SEC’s policy that if a deadline falls on a weekend, it’s pushed to the next federal business day, according to Spencer Bogart, managing director and head of research at Blockchain Capital.

One more day of anticipation on whether the bitcoin ETF is a go wouldn’t be a big deal if it weren’t for the fact that the industry seems to be able to talk about little else. In fact, Friday, bitcoin prices raced to a new record high above $1,300 in anticipation of a SEC “yes” to this fund.

Here’s why this is such a big deal …

Bitcoin’s Big Moment

The Winklevoss Bitcoin Trust (COIN) would be the first ETF to offer investors everywhere easy, transparent access to this peer-to-peer, unregulated digital currency that has gathered quite a following since the financial crisis of 2008.

That access would be made possible to anyone without the need to create separate accounts with bitcoin exchanges.

To be fair, as Bogart puts it, adoption and use of bitcoins and its network have already been growing rapidly without the help of the ETF wrapper. Still, a bitcoin ETF should accelerate the already-fast-growing footprint of bitcoins.

Why A Bitcoin ETF Matters

“A bitcoin ETF would be a significant catalyst for a few reasons,” Bogart said. “For one, it would open the gates of bitcoin to institutional capital. Among other things, this could have a profound impact on price.”

Most institutional investors have mandates that allow them to only invest in registered securities, and bitcoin isn’t one, he says. But in an ETF, it would fit that bill. If nothing else, having a bitcoin ETF approved would improve “public perception” and help manage some of the regulatory risk many associate with bitcoin’s unregulated status.

“In addition, retail investors would be able to get exposure to bitcoin directly from their brokerage accounts instead of establishing a separate account with a bitcoin exchange,” Bogart added. “The way to think about ETF approval is as a low-probability catalyst that could accelerate bitcoin’s already-rapid adoption growth.”


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