SEC to review Winklevoss bitcoin ETF ruling Apr 25th, 2017 | By George Watson | Category: ETF and Index News **Please join us at our Income & Yield Strategy Briefing, with presentations from BMO, Fidelity, First Trust, Lyxor and WisdomTree, on Thursday 29th June 2017 @ The Ned, London - REGISTER NOW**The Securities and Exchange Commission (SEC) is to review a decision it made last month to deny a listing application for an ETF that tracks the price of the cryptocurrency bitcoin.News of the SEC filing on 24 April pushed bitcoin close to its all-time high.The proposed ETF, the Winklevoss Bitcoin Trust, is the brainchild of the Winklevoss twins, who own a stake in Gemini, a bitcoin exchange.The SEC denied an application for listing the ETF on US exchange Bats on the grounds of “the risk of fraudulent activities due to the lack of regulation in major bitcoin markets” after more than three years of deliberation (See: Winklevoss-backed Bitcoin ETF halted by SEC).The SEC judgement in March caused the price of bitcoin to drop 25% from all-time highs of $1327.

However, bitcoin has rallied since then as global acceptance has continued to grow, with Japan the latest country to announce it would accept the currency as a legal payment method.Many market commentators argue a bitcoin ETF would open distribution channels to additional investors that would send the price of bitcoin higher.The SEC has now approved a petition from Bats to reconsider its March ruling, sending the price of bitcoin back to levels seen before the initial decision in March.There is no word yet on when this judgement may come.Bitcoin is the most widely used of several cryptocurrencies that allow near anonymous transactions between strangers without the need for a central authority such as a bank or government.Additional bitcoins are “mined” by highly sophisticated computers that are rewarded with payment in bitcoins for verifying transactions added to the blockchain, the distributed ledger at the heart of bitcoin.The SEC is also mulling rule change applications from NYSE Arca that would allow it to list two other bitcoin ETFs, the Greyscale Bitcoin Trust and the SolidX Bitcoin Trust.

Leave a Comment More in ETF and Index NewsCanadian ETF/ETP assets reach record $92bn in MarchAssets invested in exchange-traded funds and exchange-traded products listed in Canada reached a new record high of $92 billion at the end of...European ETF/ETP assets reach $640bn at Q1 endAssets invested in exchange-traded funds and exchange-traded products listed in Europe reached a new record high of $640 billion at the end Q1...CloseGlobal investment bank and asset management firm Needham & Company recently released a short investment report focusing on the the Grayscale Bitcoin Investment Trust (GBTC).While analyst Spencer Bogart gave GBTC a “Hold” rating, which means the price of the Trust is expected to go sideways over the coming year, the report also included detailed research on the upcoming Winklevoss ETF.Founded in 1985, Needham & Company LLC is a New York-based investment banking and asset management firm that focuses only on growth companies.An underwriter for 278 IPOs including Google, the firm has led or co-managed 785 public offerings in total, and completed over 385 mergers and acquisitions for a total transaction value of over $200 billion.

The firm also provides private advisory and transaction-related services, Equity research, institutional sales, and trading for their clients.The report, authored by analyst Spencer Bogart, was made for clients subscribed to their ‘Internet/Financial Technology’ investment outlook series.- Spencer Bogart, Needham & Company Analyst The Winklevoss twins’ long-awaited ETF is pending approval from the Securities Exchange Commission (SEC).After years of delay and amended filings, a decision is scheduled for 11 March 2017, and marks the end of a final extension period.bitcoin tauxBogart analyzed the ETF as he feels that the listing of a bitcoin ETF, “is a low probability event with very significant upside.” Such a large upside, in fact, that it would greatly affect the price of the GBTC, which is based upon the price of one-tenth of a bitcoin plus a premium.bitcoin cost timeline

The effect, Bogart believes, of any SEC-approved bitcoin ETF would have on the price of bitcoin, ”is vastly underappreciated.” However, the Bogart estimates the probability of the SEC approving the Winklevoss ETF in 2017 is, “sub-25%.” While there is no specific reason given for the estimate the report states, “the confluence of fear, uncertainty and doubt coupled with basic incentives at the SEC will make it very difficult to get approval.” “We think it’s a difficult task for the SEC to separate the legitimate probability of something going very wrong from the general fear, uncertainty, and doubt that lurks in bitcoin’s wake,” Bogart states.bitcoin pastebin“We don’t see much upside to approval for the individuals tasked with making this decision.” The Needham Analyst also explores a third outcome, the SEC simply not responding, which Bogart sees as a positive outcome.cara bitcoin cepat

If March 11 comes and goes with no response from the SEC, “the proposed rule change is automatically approved,” he explains, “politically, it might be easier for the individuals responsible for making the decision to let the decision go to auto-approval.” That doesn’t mean that the fund itself is approved, the report clarifies, but may improve the chances.If any bitcoin-backed ETF is approved at any point the effect would, “add legitimacy to bitcoin in the eyes of investors,” the report states, and “would significantly improve perceived regulatory risk.” “We wouldn’t be suprised to see over $300M of assets flow into such an ETF in the first week,” Bogart states.bitcoin kredit“Even under normal circumstances this would be difficult to do without significantly affecting price.” The regulatory benefits would be at least as significant in driving price up, the report claims.usc bitcoin

The Winkelvoss ETF and GBTC aren’t the only bitcoin based investment vehicles.While the Winklevoss ETF  is slated for trade on the BATS exchange, the SolidX Bitcoin Trust is designed for trading on the NYSE.The fund only filed with the SEC in 2016, giving the Winklevoss fund a three-year head start on the filing process.A few other ETFs, both around the world and inside the US, are launching without waiting out the long process of applying for SEC approval.Grayscale’s GBTC was the first to do so, heading straight to an Over-the-Counter exchange called SecondMarket when it launched in 2014.ethereum atm machineA year later it moved to the OTCQX where it resides today, trading well above the underlying asset value.litecoin alternativeUnfortunately for the casual investor, GBTC requires full investor accreditation.raspberry pi bitcoin os

There are also several similar funds in Europe, including a fully exchange-traded fund on the Channel Islands Stock Exchange, called the Global Advisors Bitcoin Investment Fund (GABI).The fund opened in 2014, but only received their exchange trading license last month.GABI has returned 56.95% in the last year, compared to 37.42% in the previous year.GABI’s management company, Daniel Master’s GAJL, also has a couple of separate bitcoin-backed options called Exchange Traded Notes (ETN)/ Bitcoin Tracker One and Bitcoin Tracker EUR were both managed by the Swedish firm XBT Provider, until they were sold to GAJL.None of these products needed SEC approval, as they aren’t being sold to US citizens.The story of bitcoin ETFs begins and may possibly end with the Winklevoss ETF, if Bogart’s estimation is accurate.In mid-2013 the twins filed for their fund for the first time after scooping up one percent of all bitcoins in existence.Three and a half years, and six filing amendments later, a decision is imminent.