SEC Rejects Rule Change for Bitcoin Exchange-Traded Fund [pdf]

It's interesting, based on the rest of the ruling, that they're not particularly concerned with any other aspects of it as a commodity (they acknowledge various interesting properties of it but note that those wouldn't themselves prevent them from approving this), but instead solely concerned that the rest of the Bitcoin market isn't controlled and monitored well enough for them to regulate activities on it.

In summary: "First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated."

Which is exactly right, but couldn't the same argument be used against a gold etf?

Bitcoin just went from a high of 1327.1926 to 995.9575 in the blink of an eye.

Wow.

From the ruling....

> First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated.

> Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. I'm not sure I entirely understand if they mean that Bitcoin itself must be regulated or just that the SEC needs to see that the major exchanges are regulated.

If its the former, then I think this is game over, if its the later then............hmmm I really don't know.

EDIT Having gone through the ruling it looks like they have a few reservations.

1) Most of the bitcoin trading happens on unregulated markets

2) Most of the volume happends in China and not the us and is therefore hard to regulate.

3) The ETF is tied to the Winklevoss own Gemini exchange which has little volume and often inferior pricing to other more liquid exchanges.

4) They bring up the lack of a liquid futures market, though I'm not sure this is really a concern.

> The Commission has, in past approvals of commodity-trust ETPs, emphasized the importance of surveillance-sharing agreements between the national securities exchange listing and trading the ETP, and significant markets relating to the underlying asset. 144 Such agreements, which are a necessary tool to enable the ETP-listing exchange to detect and deter manipulative conduct, enable the exchange to meet its obligation under Section 6(b)(5) of the Exchange Act to have rules that are designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest

So until bitcoin markets are regulated by the SEC or similar no ETP/ETF products I suppose.

I'm a bit disappointed that there is no ETF but this is pretty darn reasonable.

https://cryptowatch.de/kraken/btcusd - chart

gravity is strong here