Bitcoin exchange-traded funds (ETF) were all the rage in 2018. Back then, investors were convinced that these vehicles would have wrested the cryptocurrency market from the grasps of bears.

Countless analysts stated that the launch of a U.S.-regulated Bitcoin ETF would allow for investors, both in the retail and institutional class, to make their first forays into the crypto market.

Bitcoin

It seems, however, that investors will need to wait on the launch of these products, with the U.S. Securities and Exchange Commission (SEC) delaying their verdicts for the umpteenth time.

Bitcoin ETFs Slapped Down by SEC

On Monday, the SEC revealed that it would be simultaneously delaying its verdicts on three Bitcoin ETFs — yes, they’re still a thing. The pertinent products are from Bitwise Asset Management, VanEck and SolidX partners, and Wilshire Phoenix. Bitwise’s and VanEck’s products are both similar, in that they both plan to be 100% backed by Bitcoin; Wilshire’s product differs from the pack, intending to mix Bitcoin with short-term U.S. Treasury securities to reduce risk and volatility.

The SEC will have to make a final decision on Bitwise’s and VanEck’s proposal by mid-October. The delay of the Wilshire verdict gives the financial regulator another ~45 days to come to a conclusion, meaning the next ruling deadline is September 29th.

Unlikely to Pass Anyway

This recent SEC decision was actually expected by investors in the industry. Just a day prior to this news, Ethereum-based Compound’s general counsel, Jake Chervinsky, explained on Twitter that the proposals had a 90% chance of getting delayed.

He didn’t explain his rationale this time around. But, prior to and in the wake of previous SEC decisions on cryptocurrency products, he has accentuated the regulatory body’s concerns with market manipulation, surveillance, and other concerns.

Also, Jeff Dorman, the chief investment officer of crypto finance firm Arca, shared in July that Bitcoin’s price action back then was not what the SEC is looking for in a market underlying an ETF. As reported by Blockonomi previously, June’s volatility has dramatically decreased the likelihood of a Bitcoin ETF garnering approval from the U.S. Securities and Exchange Commission (SEC).

For those who missed the memo, the cryptocurrency market exploded by dozens of percent, with BTC reaching $14,000, then crashing lower in the days that followed. Dorman claimed that this turn of events can almost be likened to a “slam dunk” on the chances of any Bitcoin ETF. He then elaborated:

“An 81% 14-day levered rally, most of which occurred after U.S. trading hours, is not exactly the formula for successful SEC approval.”

Indeed, the rally was, by most definitions, not sustainable or organic. The Arca C-suite member, in fact, noted that the rally was “caused by excessive leverage and outsized risk-taking”, marked by the absurd day-to-day swings and the absurd levels of volume seen on futures exchanges, especially margin-enabled outfits like BitMEX and Bitfinex.

They Don’t Matter

Here’s an opinionated aside: ETFs don’t matter for the success crypto. This industry has made it to a point where the success of Bitcoin and its ilk aren’t tied to the thoughts on one regulatory agency. We have reached the point of critical mass.

The world economy is currently in turmoil. Two of the world’s largest economies seem poised to commence a currency war; one of the world’s largest financial hubs, Hong Kong, is bubbling with mistrust for the government; currencies have continued to capitulate against the U.S. Dollar, populism is on the rise, and the working class, in places like France, have had just about enough.

Also, institutions that have expressed interest in Bitcoin have other mediums of investment, namely Fidelity Digital Asset Services and Bakkt.

All this is supportive of Bitcoin.

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