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Experts Have Quite Contradictory Opinions Regarding BTC ETF Approval and Its Importance

A few days ago, the Winklevoss brothers’ request to start a Bitcoin ETF was denied after a controversial SEC decision that served as a catalyst to increase bearish sentiment in the crypto-investor community after an excellent week in which Bitcoin and the rest of the cryptos seemed to had bounced back to new heights.

Following the SEC decision, a controversial letter issued by Comm. Hester Pierce, in which she publicly stated her dissent sparked the debate in the community, giving a touch of optimism to bulls and hodlers who quickly saw her as their voice in the SEC.

Bitcoin ETF: A Complicated Topic

Ran Neu-Ner

There are still at least 4 Bitcoin ETF applications left for this year. The contradiction between the SEC’s background as a “denier” of opportunity and Pierce’s vision as promoters of innovation has allowed experts to provide media with interesting insights into Bitcoin’s future at the regulatory and institutional levels, and especially about the possibility of ETFs and the impact these decisions would have on the market.

Ran Neu-Ner, host of the “Crypto Trader” show aired on CNBC in Africa, had a conversation with a panel of experts in the field, and although the opinions were solidly based on arguments, they were somewhat contradictory:

Michael Sonnenshein, Managing Director – Grayscale Investments

Michael Sonnenshein

Mr. Sonnensheim does not believe in the possibility of a Bitcoin ETF being approved during 2018. When asked about it, this was his answer:

“so it’s really hard to say… I think that there are still quite a few concerns that the SEC has. If you look at the recent letter they published when they denied the Winklevoss ETF they’re still looking at a lot of factors within the underlying market including surveillance, regulation and to the best of my knowledge many of those things haven’t changed just yet.”

When asked about the importance of a Bitcoin ETF for the ecosystem, Mr. Sonnenshein does not consider it to be so relevant:

“I think it’s actually not as important as people make it seem … we’re actually seeing the institutional inflows into this space despite the fact that there isn’t an ETF.”

Arthur Hayes, CEO – Bitmex

Arthur Hayes

Mr. Hayes is not sure about a prediction regarding a Bitcoin ETF approval on 2018. When he was first asked about it he said:

“I actually took a look at the SEC website and there are two ETFs that have decision dates in q3 and September and two that have decision dates in q1 February of next year so I’d say there’s probably a 50/50 chance that we see some decision in q3 again and then again we have another to each yes looking for approval in February of next year”

However, at the end of the interview, Mr. Neu-Ner asked him to answer with one word: Will there be an ETF Bitcoin by the end of 2018? To which Mr. Hayes replied: “Yes.”

For Mr. Hayes an ETF Bitcoin is critical to the community:

“ it’s very important to get more retail money into the system because at the end of the day retail traders don’t want to have to worry about securing a Bitcoin wallet, where do they buy it from, using the different exchanges… so if all they have to do is click on an e-trade … they could buy an ETF which gives an exposure to Bitcoin but not allow them to actually experiences the risks of holding it that’s a very powerful way for them to get involved”

Mr. Hayes still maintains his position that Bitcoin (BTC) is “one ETF away” from reaching a value of 50k USD

Mark Brady, former ETF builder – Blackpool

MArk Brady

Mr. Brady considers that from a pragmatic point of view, an ETF represents a great opportunity, so he considers it to be of particular importance to the crypto sphere:

“Well I think from the standpoint of mass retail acceptance it’s very important when you think of an ETF it’s basically a container that allows you to put in different underlying assets that may be difficult for average retail investor to get exposure to”

When asked about the possibility of a Bitcoin ETF being approved in 2018, his response was stark:

“Very unlikely.”

The main reason is that he does not see a sufficiently regulated market in the near future to create the necessary conditions for an ETF.

Mati Greenspan, Senior Analyst – eToro

Mati Greenspan

Mr. Greenspan was perhaps the most ambiguous or conservative of all. Regarding the possibility of spotting a Bitcoin ETF by 2018, he said:

“Before the end of 2018, it doesn’t seem likely; however, it is a possibility for the first quarter of 2019.”

According to Greenspan, the SEC is likely to postpone some of its decisions until 2019, when the market will have a higher level of maturity.

Regarding the importance of Bitcoin ETF, he considers it important but does not give it much relevance.

“So yes it could be a good thing in that it’ll bring fresh money into the market new liquidity into the market is a very good thing and very healthy for the ecosystem
I don’t think that it’s the most important thing in the world, but if the ETF is approved what happens to the Bitcoin price most likely it’ll go up.”

Full show available here:

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UPDATE: Bitcoin Bulls Push BTC Price Back Above $8200

Bitcoin (BTC)–Investors in cryptocurrency, particularly the original coin BTC, have had an interesting week. While the currency managed to grow nearly 35% over the past two weeks, signaling what appeared to be the end of 2018’s prolonged bear cycle, the run was put to an abrupt halt following news of the Winklevoss twins’ bid for a Bitcoin ETF being denied by the SEC.

Bitcoin prices had hovered around $8300 for most of the week, before taking a plunge back into the $7900 range on Thursday when news broke that the Securities and Exchange Commission (SEC) had denied high profile crypto figures Cameron and Tyler Winklevoss the creation of a Bitcoin Exchange Traded Fund. The Winklevoss twins, who also founded the cryptocurrency exchange Gemini, had made a second attempt with the SEC on approval of a BTC-based ETF, which would mark the first ever of its kind. While much of the market and industry news has been in a stir over the looming–as some would put it “almost guaranteed”–creation of Bitcoin ETFs, the news came as a harsh ruling by the SEC on the potential for other funds.

However, while Bitcoin prices seemed to be rebuffed by the sudden news out of the U.S. regulatory agency, bullish investors were able to renew the price run on Friday morning, bringing BTC back into the $8300 range.

The denial of the Winklevoss ETF does represent a momentary setback for cryptocurrency. However, the SEC had previously announced a move to delay the decision on five other Bitcoin ETFs until September, giving the appearance that the agency is still collecting information on Bitcoin and evolving its position towards cryptocurrency. Given the overwhelming number of institutional figures, hedge fund leaders and other financial entities clamoring over the need for a regulated Bitcoin ETF, it seems only a matter of time until the SEC allows one to go through. As Arthur Hayes, co-founder of cryptocurrency exchange BitMex, told CNBC in early July, the presence of regulated funds in addition to greater government oversight in the investment process could lead to a significant price run for BTC.

While every investor and crypto-enthusiast has been espousing “institutional money” that has yet to throw its weight behind cryptocurrency, Hayes points out that most big-money and Wall Street players are waiting for greater clarity from government authorities before taking the plunge. Given the erratic nature of most exchanges, from hacks to the mounting catalog of consumer complaints, it’s almost no surprise that an ETF would provide a more appealing route for investing in Bitcoin. The bullish return for investors this morning would indicate that sentiments are still strong on the possibility of a BTC ETF creation, despite the setback received by the Winklevoss twins, as opposed to yesterday’s headlines concerning the status of a new fund formation.