[2017-02-11] Analysts: Be Ready For Trading Frenzy If SEC Approves A Bitcoin ETF

[bitlamp]

Should the Securities and Exchange Commission (SEC) approve the Winklevoss Bitcoin ETF on March 11, expect a speculative rush on bitcoin, according to Rob Curran, writing in The Wall Street Journal.

Once approved, an easily accessed ETF would provide a chance for average investors to participate in the bitcoin market, bringing droves of new investors.

Fears Over Irrational  Exuberance

Christopher Burniske, blockchain products lead at ARK Investment Management, which invests in an ETF-like fund that trades over the counter, said he is concerned that a bitcoin ETF could bring irrational exuberance if bitcoin’s price significantly appreciates.

SEC approval will allow the Winklevoss Bitcoin ETF to trade on the BATS Global Market exchange.

Two other bitcoin ETFs, the Bitcoin Investment Trust and the SolidX Bitcoin Trust, have also filed with the SEC to be listed on the New York Stock Exchange and would also give ordinary investors more access to bitcoin investing.

Most bitcoin observers say a bitcoin ETF is inevitable.

Bitcoin Owners Stand To Profit

The Winklevoss twins, who filed the application, would gain from any price increase the ETF brings as they are among the largest individual bitcoin holders. The same is true for Barry Silbert, the entrepreneur who operates the Bitcoin Investment Trust.

Neither the Winklevoss twins or Silbert would comment.

The SEC has raised questions about bitcoin since the Winklevosses applied for approval in 2013. Could robots hijack most of the mining capacity and disable the system? Could the fund be hacked? Could bitcoin split into two rival currencies?

Needham & Co. analyst Spencer Bogart said the Winklevosses have addressed security questions, including keeping private keys locked in offline computers. Different individuals in various locations would need to grant access at the same time to a bad actor seeking to see the keys.

Bogart nonetheless said the SEC could deny approval since the Winklevosses have kept many fund functions private.

https://www.cryptocoinsnews.com/analysts-ready-trading-frenzy-sec-approves-bitcoin-etf/

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[panju1]

The chances of the ETF getting approved are low (~25%). The mandate of the SEC is to protect investors, not encourage financial innovation. So most probably, this is going to be a damp squib.

[1Referee]

The chances of the ETF getting approved are low (~25%). The mandate of the SEC is to protect investors, not encourage financial innovation. So most probably, this is going to be a damp squib.

Not necessarily. Just look at how many ETF's have turned into a money vanishing tool rather than a money making tool for investors. Where was the SEC in these cases? Bitcoin has certain risks involved, but that doesn't mean the SEC won't approve it. Ignorance from SEC's side regarding Bitcoin and the effects of a Bitcoin related ETF are the only things that could hold back an approval. If everything is explained properly, where all doubts are more or less turned into understanding of what a Bitcoin ETF is all about, then I don't see how the SEC will not come over with their approval.

[cr1776]

The chances of the ETF getting approved are low (~25%). The mandate of the SEC is to protect investors, not encourage financial innovation. So most probably, this is going to be a damp squib.

Not necessarily. Just look at how many ETF's have turned into a money vanishing tool rather than a money making tool for investors. Where was the SEC in these cases? Bitcoin has certain risks involved, but that doesn't mean the SEC won't approve it. Ignorance from SEC's side regarding Bitcoin and the effects of a Bitcoin related ETF are the only things that could hold back an approval. If everything is explained properly, where all doubts are more or less turned into understanding of what a Bitcoin ETF is all about, then I don't see how the SEC will not come over with their approval.

This.  And not just ETFs, see Bernie Madoff while the SEC slept.

The SEC won't admit it, but their real role involves two things, make it look like they are doing something to protect investors while simultaneously doing a CYA to justify their budgets.