Bitcoin ETF Halted, Price Crashes Below $1000 Then Immediately Bounces Back
The Securities and Exchange Commission, also known as the SEC, has denied the first ever Bitcoin ETF (exchange-traded fund) from happening. The reasons for rejection were based on Bitcoin’s risk of fraud and lack of regulation.
News of this sent Bitcoin’s price crashing below $1,000 briefly, with a fast rebound back into the $1,100 region, almost as if the disapproval never happened. The buildup to this decision has not been boring. Bitcoin has constantly obtained new highs, as enthusiastic investors and traders alike had high hopes of seeing the Winklevoss’ ETF dream become a reality.
Another Bitcoin High Hours Before Being Denied!
If the past months have been a wild ride, then the last hours before the decision was made public have been even wilder, with no calm before the storm, as Bitcoin surpassed another high, nudging past the $1,300 mark. Rumours were floating around that a trade of 750 bitcoins was being bought and sold in the market, however, this could be false.
This sudden surge gave hope to the markets, with many people starting to believe that the SEC may do the unthinkable and actually approve the ETF. Once the bad news hit, the price dropped, giving many an opportunity to buy cheap(ish) Bitcoin. The popularity and hype around this historic event led Coinbase to crash due to the high volume of trade.
What Happens Now?
With the three-year long campaign of the ETF now officially over, where does Bitcoin go from here? In the next few weeks, the markets will correct and cool down, and it will be more likely that others will try to accomplish what the Winklevoss twins could not.
The majority of people always knew the chances were, indeed, slim for an approval, and Bitcoin still, despite all of its achievements, is an incredibly young form of technology that no one can truly predict or control.
I believe this is why the SEC denied Bitcoin its first ETF. Combined with recent money laundering regulations being implemented on Chinese exchanges and being borderless, it could have all been just too much of a risk for the SEC to take in approving it.
Maybe the SEC Feared Bitcoin’s Potential at Such an Early Age…
Maybe Bitcoin is too young. It is still relatively unheard of, and the world is still adjusting to the concept of having the tools to send money anywhere within minutes, without the use of a bank.
That being said, the SEC is still open to future proposals in the long run:
“The Commission notes that bitcoin is still in the relatively early stages of its development and that, over time, regulated bitcoin-related markets of significant size may develop.”
“Should such markets develop, the Commission could consider whether a bitcoin ETP would, based on the facts and circumstances then presented, be consistent with the requirements of the Exchange Act.”
Bitcoin and the blockchain are young and still need time to iron out many problems, such as scaling solutions and potential hard forks, which could cause market and consumer panic.
The issues that seem to arise with money laundering need to be resolved, and perhaps only then will the SEC start to see Bitcoin in a different perspective. Either way, the future of Bitcoin looks extremely bright, and this is by no means the last time we will see Bitcoin reach for mainstream usage!