QUICK TAKE: SEC Cautious On Bitcoin ETF

Bitcoin loses most of its gains from July rally as SEC postpones ETF decision

In July SEC decline to approve Winklevoss twin's bid to create an ETF and the regulator is still silent about the ruling on other institutions which have applied on the same.

The same report noted that the concept of an ETF goes against bitcoin creator Satoshi Nakamoto's original proposal to remove middlemen financial institutions that have the "inherent weakness" of the trust-based model, adding that the token therefore doesn't need one to maintain value. The decisions are set to be made by September 15.

Hong Kong: The 2018 selloff in cryptocurrencies plumbed new depths on Wednesday after the US Securities and Exchange Commission dented enthusiasts' hopes for an exchange-traded fund backed by Bitcoin. "However, the SEC has said it can push out this response period to 90 days 'if it finds such longer period to be appropriate.' Either way, the crypto community have it on their radar".

VanEck first attempted to submit a bitcoin ETF back in March 2017, though this move was dismissed by the SEC nearly instantaneously due to lack of regulation.

In the last hours, most of the virtual currencies in the market registered important loses.

"The market overreacted to a slew of applications to the SEC that had no chance of getting a quick acceptance and are now overreacting to the highly expected outcome", said Hany Rashwan, chief executive officer of crypto startup Amun Technologies Ltd.

According to CoinMarketCap, Bitcoin (BTC) is now trading at $6,509.67, down -8.50% in 24 hours.

Some investors remain hopeful, with Dan Morehead, the CEO of Pantera Capital, stating that this most recent pullback was just a market "overreaction". However, considering the fact that the cryptocurrency market is notoriously volatile, there may be more drops in the future, before market recovery begins. This puts a total of 10 bitcoin-related fund applications on the table of SEC officials. Experts like Brian Kelly of BKCM LLC have earlier pointed out that an SEC-approved BTC ETF in 2018 is highly unlikely.

Of course, this means that Bitcoin's price will once again see pressure build as we near toward September, likely raising up in anticipation of what would be good news and then either continuing up or bursting like we saw today. According to other analysts, bitcoin's long-term success is tied to the approval of ETFs and is the only catalyst that can push prices to their all-time high of $20,000 and possibly beyond.

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