Why The Future of a Bitcoin (BTC) ETF is Uncertain with the Current BCH Hash War
Before the current market turmoil brought about by the ongoing Bitcoin Cash (BCH) Hash Wars, many crypto enthusiasts were anxiously waiting on the SEC to make a ruling on a few Bitcoin ETFs.
9 Bitcoin ETFs Under Review
First on the list, were 9 Bitcoin (BTC) ETFs that are currently under review at the American regulatory body. These 9 ETF applications had initially been rejected, only for the Commission to announce it was reviewing them. According to supporting documentation, November 5th was the last day for any interested parties to submit statements in favor of, or in opposition of the ETFs proposed by the following Wall Street firms: Direxion (5), GraniteShares (2) and ProShares (2).
The SEC is yet to issue a statement approving or rejecting the ETF applications.
VanEck, SolidX and CBOE Bitcoin ETF
Secondly, there is the Bitcoin ETF application filed jointly by VanEck, SolidX and the CBOE Exchange. This Bitcoin ETF has been thought by many as the one having the best chance at getting approved. The SEC is meant to rule on the ETF by December 29th. This is after the commission postponed on another September 30th deadline to rule on the VanEck ETF.
However, the likelihood of a postponement in December is high given the current volatile crypto markets.
The Mandate of the SEC
Before we go ahead in explaining why the future of the VanEck ETF is uncertain with the current Bitcoin Cash Hash War, let us revisit the SEC website and remind ourselves what the authority is tasked with.
To protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
As more and more first-time investors turn to the markets to help secure their futures, pay for homes, and send children to college, our investor protection mission is more compelling than ever.
As our nation’s securities exchanges mature into global for-profit competitors, there is even greater need for sound market regulation.
And the common interest of all Americans in a growing economy that produces jobs, improves our standard of living, and protects the value of our savings means that all of the SEC’s actions must be taken with an eye toward promoting the capital formation that is necessary to sustain economic growth.
Current Bitcoin Cash Hash War Can Be Defined As Manipulation of Bitcoin
Further assessing the current situation where Bitcoin’s hash power is being redirected towards Bitcoin Cash, we can connect the dots and conclude that the future of a Bitcoin ETF becomes more and more bleak with each passing hour.
The price of BTC has fallen by more than 10% in the last 24 hours (from $6,300 to $5,500). The cause of the ‘crash’ can be attributed to the BCH Hash War as well as panic selling by holders of all digital assets across the crypto markets.
In conclusion, and rereading the mission statement of the SEC, a Bitcoin ETF becomes less likely on Wall Street. One is tempted to conclude that an approval is impossible given that the Bitcoin network and its price have proven to be in the hands of a few. Therefore, the SEC would want to protect investors of the United States by postponing or rejecting all ETF applications till the price of BTC has moved away from such control.
Another fact to note is that 80% of Bitcoin mining activities is concentrated in China: a country the SEC has no jurisdiction over.
Perhaps a solution would be to back an ETF with pre-mined digital assets or those with the majority of their mining activities being carried out in the United States.
What are your thoughts on the effect of the current Bitcoin Cash situation on the pending Bitcoin ETFs? Please let us know in the comment section below.
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of Ethereum World News or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.