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Bitcoin [BTC] ETF: SEC postpones verdict on ETF; final decision set for October 2019




Bitcoin [BTC] ETF: SEC postpones verdict on ETF; final decision set for October 2019
Source: Unsplash

In the middle of a significantly bullish May, a public notice was issued by the SEC, announcing a further delay to the hotly anticipated Bitwise Bitcoin Exchange Traded Fund [ETF].

A publicly-traded Bitcoin product could have major implications on the market, both on the retail side and the institutional side. The ETF will likely establish several channels of purchase and trade, allowing unrealized potential capital flowing into the cryptocurrency space.

The notice read,

“The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act 48 to determine whether the proposed rule change should be approved or disapproved. Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change”

Source: SEC notice

Source: SEC Notice

Previously, on March 29, the SEC motioned to delay the ETF proposal by 45 days to May 16, 2019, citing the need for a “longer period” to take this decision.

Currently, before the regulatory body, there are two noteworthy Bitcoin ETF applications, one from Bitwise Asset Management-NYSE Arca, and the other from VanEck-CBOE. However, both respective proposals have been pushed. A previous report stated that the latter’s application will be ruled on by May 21.

In light of this delay, the SEC will make their final decision on the ETF on October 13 for the Bitwise-NYSE Arca proposal. Jake Chervinsky, a member of the securities litigation team at Kobre & Kim, stated that any hearing until the aforementioned dates will merely result in delays and not a final decision.

He stated,

“The SEC can, and almost certainly will, delay both ETF proposals two more times.
The SEC’s *final* deadlines will be October 13 and October 18, 2019.”

One of the main reasons for the SEC’s hesitation to ETF proposals is the volatility of Bitcoin and the larger cryptocurrency market. Prior to the March delay, the SEC Chairman stated that the vulnerability of the cryptocurrency market to manipulation, as well as the rampant price volatility are the main reasons for the delays.

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JP Morgan: Big banks stand corrected as Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise




JP Morgan: Big bank stands corrected at Bitcoin rally past intrinsic value; admits current surge mirrors 2017 rise
Source: Pixabay

Big banks are riding a FOMO wave as the Bitcoin bull-run is just beginning. Spearheaded by the changing colors of JP Morgan, which recently forayed into the digital assets world, the banking elite is now suggesting that their initial stance on Bitcoin and the larger cryptocurrency world might have been off.

A recent chart by JP Morgan shows the current BTC price veer upwards chiding the “intrinsic value” the big bank placed on the virtual currency.

Based on the article by Bloomberg, the price of the coin would reverse towards the end of December 2018 and then make marginal gains until May 2019, all under the $5,000 mark. In reality, the BTC price, after dropping to “rock bottom” at just above $3,100 in early December 2018, edged upwards.

Several spurts of growth were seen in early January and February, prior to a massive April ascendance. On April 2, Bitcoin did away with the bank’s value mode and amassed a daily gain of over 15 percent, fuelling its current rise. Breaking the $5,000 ceiling in the process, which was pegged to remain intact well into May 2019, the king coin is now almost $3,000 ahead of the mark and is not looking to stop.

Source: Bloomberg

It should be noted that JP Morgan’s “intrinsic value” is calculated on the basis of the marginal cost of production, electricity prices, and hash rates. This model does not take into account, at least on absolute terms, the anticipatory effect of the 2020 halving, which, according to a slew of analysts is the behind the price rise.

Nikolaos Panigirtzoglou, the MD in the Global Market Strategy team at JP Morgan stated that Bitcoin breaking through its “intrinsic value” showed signs of mirroring its 2017 bull run. He evidenced this move by comparing the pre-December 2017 slump to the one seen prior to the current bullish swing.

The analyst added:

“Over the past few days, the actual price has moved sharply over marginal cost. This divergence between actual and intrinsic values carries some echoes of the spike higher in late 2017, and at the time this divergence was resolved mostly by a reduction in actual prices.”

With the analyst admitting that the imparting of an “intrinsic or fair value” to a cryptocurrency, much less a volatile one like Bitcoin, is a “challenging” ordeal, a mere JP Morgan acknowledgement of a Bitcoin bull-run is a remarkable sign for the digital assets industry, especially given the bank’s and its CEO Jamie Dimon’s Bitcoin-bashing in the past.

Mati Greenspan, senior market analyst at eToro attested to the same, adding a key point that JP Morgan failed to take into account in their calculation. He stated:

“Great to see JPM finally admitting that Bitcoin has intrinsic value.
Now wait till they understand that miners who run a surplus tend to begin hording.”

Despite Bitcoin slumping at press time, recording a 1.23 percent decline against the dollar, the prospects look positive. After recording a massive gain on 19 May, briefly surging past $8,000 for the second time in a week, Bitcoin created a High-Low [HL] at $7,100, which many analysts look at with glee.

This HL immediately following last week’s pull-back caused due to post-Consensus bears, a Bitstamp sell-order and market correction showed the king coin’s bullish persistence and can even be a foundation for a $9,000 ascendance, defying any “intrinsic value” expectations.

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