In a recent interview with CNBC, Matt Hougan, research leader of Bitwise, discussed the coming decision of the SEC about their bitcoin ETF. The SEC will make a decision on the application on Monday 14 October. What can this mean for the market?
You can view the interview here yourself or read our interpretation.
Bitcoin ETF can be approved
Hougan discusses a few reasons why the time is ripe for an (exchange-traded fund) ETF to be approved. He expects this to be due to multiple changes in the market. In particular, six of the ten largest crypto exchanges are now regulated by the New York Stock Exchange and other governing bodies.
In addition, the CME futures market is rising with an average volume of around $ 200 million a day. There are also more and more storage services.
With preservation services we mean Fidelity and Coinbase from San Francisco. He says that due to higher adoption, more liquidity and better security, the SEC no longer has reasons to postpone approval for an ETF.
Doubtful attitude SEC
Despite all the arguments, it is first see then believe. The SEC has so far postponed, rejected or discouraged all applications for ETFs.
The SEC has asked Bitwise and other applicants to complete a document with a thousand questions. Each question is carefully studied to find errors, and reasons for not approving an ETF.
The arch of the SEC has been tense for a while when it comes to cryptocurrencys. That is certainly due to the plans of Facebook with Libra. But this gives the SEC a lot of knowledge about cryptocurrencys, the market and technology. the danger is that the SEC decides that the market is still too unstable, then there will simply be no ETF.
Perhaps the best attitude is to never assume anything and not expect mountains of gold. Otherwise you will get a repeat of the launch of Bakkt, when the market reacted disappointed because there was little trading activity.
Cryptomarkt still under development
Nothing would make crypto lovers happier if bitcoin and altcoins are used worldwide and by everyone. But the question is whether the fundamentals are ready for this.
Ethereum is still working on Ethereum 2.0, for example, to solve problems of scale. And bitcoin is also building a reliable second layer over the blockchain to be able to offer payments more efficiently and cheaper.
Many other cryptocurrencys have yet to launch their mainnet, and now use the Ethereum blockchain. We also have to see if they can keep the promises from their white paper.
But if more money enters the market through derivatives through approval from an ETF, this can accelerate the development of the cryptomarket.