The bitcoin ETF, which was first submitted for review by financial firm VanEck and cryptocurrency firm SolidX in June, would allow investors to buy into the cryptocurrency market without purchasing bitcoins on an exchange.
Bitcoin's market dominance is holding steady at 49.1%, having taken a 7.76 per cent hit in 24 hours.
The falling spread or difference between the total market capitalization of all cryptocurrencies except bitcoin and BTC's market capitalization is also signaling reduced demand for high-risk alternative cryptocurrencies. What's particularly unique about this situation is that the VanEck ETF would have been backed not by futures, but by actual bitcoins. Meanwhile, the ETF team has submitted to the SEC key changes addressing all concerns cited as reasons for rejecting Solidx Bitcoin Trust ETF a year ago.
As CCN reported, the bitcoin price has endured a precipitous decline over the past several weeks, with analysts primarily attributing the movements to the growing realization among retail investors that the U.S. Securities and Exchange Commission (SEC) is unlikely to approve a bitcoin ETF this year.
"The market overreacted to a slew of applications to the SEC that had no chance of getting a quick acceptance and are now overreacting to the highly expected outcome", said Hany Rashwan, chief executive officer of crypto startup Amun Technologies Ltd. Later on July 2, published for comment in the Federal Register, receiving more than 1300 comments on the proposed rule change. "However, the SEC has said it can push out this response period to 90 days 'if it finds such longer period to be appropriate.' Either way, the crypto community have it on their radar".
During the interview, she was asked, "One of their [SEC's] concerns is that there may be price manipulation in bitcoin, the underlying asset, and what you are saying is that the SEC has no jurisdiction to look at the underlying asset, is that correct?" The decisions are set to be made by September 15. During its most recent the application, the startup has argued that there have been "significant changes in product, market structure and overall circumstances" since that initial decision.
What this means is that if VanEck-SolidX is attacked by hackers after SEC approves their ETF, then any loss suffered during the incident will be shouldered by the company while the investors' assets are insured.
And there is hope that a bitcoin exchange-traded fund (ETF) could come to market this year despite the SEC rejecting a second attempt by Cameron and Tyler Winklevoss, founders of crypto exchange Gemini, to introduce one. Let us know in the comments section below.