The Securities and Exchange Commission has rejected the application for Bitcoin ETF, in a remarkable failure for its founders, the Winklevoss Twins.
A Bitcoin ETF was designed to reflect the price of bitcoin as its only asset will be bitcoin.* Shares of the ETF were supposed to represent fractional ownership of the fund’s total bitcoin.
In an order today, The SEC concluded that the suggested fund was too sensitive to manipulations and frauds, due to the unregulated nature of Bitcoin. The result is a major impediment for the fund.
The ETF is essentially a common stock fund pegged to the price of Bitcoin, enabling investors to invest in Bitcoin without owning and storing actual BitCoins.
Since the ETF is a financial instrument, it requires approval from the SEC.
In the past weeks, the speculation about The Bitcoin ETF has fueled a historic bullish market. Unfortunately for speculators, the commission ultimately concluded that the price of Bitcoin is still too vulnerable to frauds and manipulation.