The US Securities and Exchange Commission has rejected an effort to list the Winklevoss Bitcoin ETF (COIN), prompting comment from many of those who watched and waited for the decision.
Reactions to the news were, as can be expected, mixed. Markets, having hit a new all-time high of roughly $1,325 prior to the decision, fell sharply before recovering above $1,100. Some observers deemed it a setback for bitcoin, while others, by comparison, said that it wouldn't have any long-term impact.
When reached for comment, Tyler Winklevoss struck an optimistic note, telling CoinDesk that more engagement with the agency would follow.
He said in a statement:
Also striking a positive note was Spencer Bogart, head of research for Blockchain Capital. Bogart told CoinDesk that he thinks the rejection to the Winklevoss bitcoin ETF will have no impact on bitcoin’s "compelling fundamental growth story".
However, he argued that the decision dampens the chances that the SEC will approve other bitcoin-tied financial products, deeming their likelihood "extremely low".
Others took a more critical position in light of the exchange's reasoning behind its decision. In a 38-page document, the agency pointed to a lack of surveillance in the global bitcoin market, as well as an overall lack of regulation that it posited could spur investor fraud.
Yet Jerry Brito, executive director of the non-profit Coin Center, argued that the decision "creates a chicken and egg problem" in which roadblocks to new financial products hinder the kind of development needed to address those concerns.
Charles Hayter, CEO and founder of cryptocurrency data site CryptoCompare, told CoinDesk that the rejected bitcoin ETF application, had "dashed" the "hopes that bitcoin would move towards mainstream finance".
At the same time, Hayter went on to say that the SEC's decision doesn't preclude the launch of other bitcoin exchange-traded products. Sweden, for example, is home to the Bitcoin Tracker One exchange product.
“Whether other jurisdictions will allow a Bitcoin ETF remains to be seen," said Hayter. "But for the time being all is not well – and it seems as if the other ETFs in the pipeline for the SEC are facing the same stone wall."
But will the decision slow bitcoin down itself? Adam Back, CEO of bitcoin startup Blockstream, said he thinks today's turn of events has only delayed the inevitable.
He told CoinDesk:
Others, too, reflect on the decision in light of the digital currency's future. Dave Nadig, CEO of industry news site ETF.com, said he wasn't surprised by the SEC's move. In fact, he posited that bitcoin's unregulated nature is an inherent part of the digital currency.
"The decision isn't that surprising. Ultimately this is less about what bitcoin is or isn't, and is about the underlying market structure for bitcoin itself. If the SEC doesn't know where the buck stops on a security, it's hard for them to get behind it," he said, concluding:
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