Update March 10th 2017 – The SEC has rejected the Bitcoin ETF suggested by the Winklevoss twins.According to a publicly distributed notice detailing the decision, the SEC said: “As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.” Recently there has been a lot of talk about the Bitcoin ETF that was set up by Tyler and Cameron Winklevoss.In this short post I want to give you a general overview about what’s all the fuss about, and let’s start with the basics.ETF stands for Exchange-Traded Fund.It’s basically an investment vehicle that tracks the performance of a specific asset.In plain words, it’s a piece of paper you invest in that tells you “I’ll be worth whatever X is worth” – X being a specific asset such as oil, gold, bonds, stocks or currency.

It’s a simple way of investing in an asset without owning the asset itself.Since a lot of people who trade don’t really care about the actual asset but only about its profit and loss, ETFs simplify the investment process.ethereum miner on macSo if I want to invest in Gold for example because I think the price of gold is about to explode, I don’t have to buy physical gold, I can just buy a gold ETF.bitcoin core change data directoryAs you probably figured out by now, the Bitcoin ETF is a type of ETF that will mimic Bitcoin’s price – it is set to be traded on the Bats Exchange.buy litecoin philippinesThis means that anyone who trades on the Bats will be able to invest in Bitcoin (including large institutional investors).bitcoin exchange denver

It will also eliminate the need for storing and securing your Bitcoins since you don’t own the currency itself.At the moment the SEC (Securities and Exchange Commission) is debating on whether to approve or decline the ETF.5 gh/s bitcoin miner priceThe ETF proposed by the Winklevoss brothers is not the only ETF waiting to be approved by the SEC.bitcoin mining outletSolidX also proposed to set up an ETF and is waiting until March 30th for the SEC’s approval to be listed on the NYSE.Grayscale filed to list their ETF also.However, the Bitcoin ETF by the twins is probably the first in line as they originally filed their request in 2013.The SEC is said to supply it’s response on March 10th 2017.However,if the SEC doesn’t issue a ruling one way or another, the proposed fund would be approved by default.Given that no ETF has been brought to market in this way, this is considered an exceedingly unlikely outcome.

Once there is a SEC regulated ETF on the market this opens up the opportunity for many investors to jump in and invest in Bitcoin without actually holding the currency by making it more accessible.The SEC’s approval would be another major step towards regulation Bitcoin worldwide.Also since this is an investment vehicle you will be able to short sell it if you think the market is going down.Furthermore, investing in an ETF will remove one of the major drawbacks currently holding people from investing in Bitcoin – the need to understand the currency and how to secure your coins.The main disadvantage of the ETF lies with the fact that the investment trust of the Winklevoss twins which issues the ETF currently doesn’t have insurance for investors’ money in case their coins are lost or stolen.SolidX on the other hand does supply insurance (but will be approved/rejected on a later date).Also there is a fee of around 2% attached to investing in the Bitcoin ETF.However, seeing how this is relatively low compared to the usual fees people face when buying Bitcoins I don’t think this will deter a lot of investors.

Wouldn’t we all want to know :) Nobody can really say how this will affect Bitcoin in the long run, however the logical outcome would be that if the ETF is approved, more people will now be able to invest in Bitcoin and the price will gradually rise.Just for the sake of comparison, gold ETFs were introduced in the mid 2000s and after that the spot price for gold tripled within 5 years.However, if the SEC rejects the ETF this may cause panic in the market and have a lot of people selling their coins bringing the price of Bitcoin down.To conclude, it seems like this is going to be a very interesting week… About Latest Posts Latest posts by Ofir Beigel (see all) [Review] Changelly VS ShapeShift– The “Instant” Cryptocurrency exchanges “Bitcoin and Ethereum…both soon obsolete” – James Ricakrds | $2623.69 “Why Bitcoin Can’t Serve As A Currency” – Seeking Alpha | $2345.56In an industry shocker, the Securities and Exchange Commission (SEC) denied the Winklevoss Twins' request to launch a Bitcoin ETF.

This surely comes as a blow to the twins, most famous for their claim to having originated the idea for Facebook, Inc.(FB) and their ensuing lawsuit against fellow Harvard alum Mark Zuckerberg.The SEC denial comes nearly four years after Tyler and Cameron Winklevoss filed for regulatory approval, back in summer 2013.The Winklevoss ETF was one of three would-be Bitcoin ETFs that were awaiting SEC approval; this decision does not affect any of the other applications, nor future ones (yet).So why would you care about a Bitcoin ETF anyway?One can buy the most popular cryptocurrency, the bitcoin, at any designated bitcoin exchange.But what if one wants to buy and hold bitcoins as a long-term investment like a stock?For those who are excited about the better future valuations of bitcoin, but are less tech-savvy or worry about bitcoin thefts from their digital wallets, the recently announced bitcoin exchange-traded fund (ETF) is a way to go.(For more, see: A Look At The Most Popular Bitcoin Exchanges.)

Bitcoin ETFs will give individual investors an opportunity to invest over the long-term in bitcoins, without the need to buy the bitcoins directly.It also eliminates the hassles of managing digital wallets.Short-term traders can bet their money on short-term price moves of bitcoin ETF units and attempt to benefit from trading profits.How A Bitcoin ETF Works It would follow the standard process of any ETF.(For more, see: An Inside Look At ETF Construction.)In any ETF, unit prices closely mirror the price of the underlying.For example, the price of one share of the popular gold-based SPDR Gold Shares ETF (GLD) closely reflects price of one-tenth of an ounce of physical gold.Advantages Of The Bitcoin ETF Many investors interested in taking positions in the cryptocurrency are still skeptical about bitcoin, given that it is not traded on a standard exchange.There are also doubts about its regulation.Bitcoin ETFs will allow standard trading of bitcoin on known exchanges.The ownership and responsibility to securely hold the underlying bitcoins will lie with the entity offering the ETF, and not the bitcoin ETF investor.

Bitcoin ETF trading would allow shorting of bitcoins for traders who may have a bearish view.High price swings have been observed in bitcoin valuation (above $1000), which may keep actual bitcoins out of reach of common investors.Bitcoin ETFs allow fractional investments that can make investing in bitcoins affordable to common investors.Risk Factors Of Bitcoin ETFs A Bitcoin ETF, like all ETFs, is solely concentrated on a single underlying asset, the bitcoin.Most of the risk factors pertain to the characteristics of the underlying cryptocurrency.Bitcoin valuation is highly speculative in nature, very volatile and currently unregulated by any central authority.There is no authority to approach in case of problems with Bitcoins.This risk will eventually be borne by Bitcoin ETF investors.(For more, see: The Risks Of Buying Bitcoin.)ETFs would be exposed to the general market risk and liquidity risk.(For more, see: Bitcoin: Liquidity Of Bitcoins.)With no designated clearinghouse or central depository for custody of Bitcoins, Bitcoins are prone to digital theft and loss even from the ETF's custodian.