The crypto world has been abuzz lately with the thought of an upcoming ETF. Despite the SEC’s refusal of the recent Winklevoss proposal, the excitement has not abated. Markets did see a prompt sell-off by investors when news of the refusal broke. Those that panicked and sold however would see the price of BTC strongly reverse and recover within a day.
Positive vibes have stayed strong, most likely resulting from multiple statements being made from industry players. Here are a few reasons that may be attributing to investors brushing off the Winklevoss denial.
Not the first application
– It is important to note that the ETF application made by the Winklevoss twins was already denied months ago. The most recent denial that made the news was towards an amended version of their first proposal.
SEC commissioner speaks out
– The public is now aware that not everyone at the SEC is on the same page. There are those within the commission that have made it clear that their stance regarding crypto does not align with SEC decisions
– Commissioner Hester M. Peirce stated in a release, “I respectfully dissent from the Commission’s order disapproving a proposed rule change…I am concerned that the Commission’s approach undermines investor protection by precluding great institutionalization of the bitcoin market.”
– The released statement entails multiple pages detailing the reasons for her reasoning. For a full reading of the dissent, click HERE
– Commenting on the SEC ruling of the Winklevoss ETF, VanEck touched on each of the concerns raised in the denial
– Much like Commissioner Peirce, they believe that manipulation is not a reason to shy away from the market. It is exactly why the SEC needs to allow for institutional investors, as they will minimize market manipulation.
– Arbitrage exists everywhere, and growth in the industry through an influx of funds will only diminish the potential for it to occur.
– Other topics touched on ranged from valuation to custody to liquidity.
– The entirety of the response to the SEC on behalf of VanEck can be read HERE.
Thomas Lee approves of a strong recovery from the denial
– Lee had stated to the media that, “It’s a sign of a positive change in crypto that bitcoin has essentially shrugged off the Winklevoss ETF rejection. If this took place in April-June (more bearish period), the crypto market would have seen a sizeable sell-off. In short, affirming why technical improving.”
Overall it is clear that the SEC will find it increasingly difficult to continue denying ETF applications. Market solutions that directly address the concerns raised by the SEC are continually coming online. In addition, there are those within the SEC that believe an approval should have taken place already. Eventually the SEC will run out of potential complications to point at and blame for denials. With a backing from the CBOE, this upcoming ETF might be the one to that eases their fears.