The US Securities and Exchange Commission has rejected an effort to list the Winklevoss Bitcoin ETF (COIN), prompting comment from many of those who watched and waited for the decision.
Reactions to the news were, as can be expected, mixed. Markets, having hit a new all-time high of roughly $1,325 prior to the decision, fell sharply before recovering above $1,100. Some observers deemed it a setback for bitcoin, while others, by comparison, said that it wouldn't have any long-term impact.
When reached for comment, Tyler Winklevoss struck an optimistic note, telling CoinDesk that more engagement with the agency would follow.
He said in a statement:
"We remain optimistic and committed to bringing COIN to market, and look forward to continuing to work with the SEC staff. We began this journey almost four years ago, and are determined to see it through. We agree with the SEC that regulation and oversight are important to the health of any marketplace and the safety of all investors."
Also striking a positive note was Spencer Bogart, head of research for Blockchain Capital. Bogart told CoinDesk that he thinks the rejection to the Winklevoss bitcoin ETF will have no impact on bitcoin’s "compelling fundamental growth story".
However, he argued that the decision dampens the chances that the SEC will approve other bitcoin-tied financial products, deeming their likelihood "extremely low".
"The ground for disapproval of COIN appear to be driven by concerns with bitcoin’s underlying markets as opposed to something specific to the COIN filing."
Others took a more critical position in light of the exchange's reasoning behind its decision. In a 38-page document, the agency pointed to a lack of surveillance in the global bitcoin market, as well as an overall lack of regulation that it posited could spur investor fraud.
Yet Jerry Brito, executive director of the non-profit Coin Center, argued that the decision "creates a chicken and egg problem" in which roadblocks to new financial products hinder the kind of development needed to address those concerns.
"How do we develop well-capitalized and regulated markets in the U.S. and Europe if financial innovators aren’t allowed to bring products to market that grow domestic demand for digital currencies like Bitcoin?"
Charles Hayter, CEO and founder of cryptocurrency data site CryptoCompare, told CoinDesk that the rejected bitcoin ETF application, had "dashed" the "hopes that bitcoin would move towards mainstream finance".
At the same time, Hayter went on to say that the SEC's decision doesn't preclude the launch of other bitcoin exchange-traded products. Sweden, for example, is home to the Bitcoin Tracker One exchange product.
“Whether other jurisdictions will allow a Bitcoin ETF remains to be seen," said Hayter. "But for the time being all is not well – and it seems as if the other ETFs in the pipeline for the SEC are facing the same stone wall."
But will the decision slow bitcoin down itself? Adam Back, CEO of bitcoin startup Blockstream, said he thinks today's turn of events has only delayed the inevitable.
He told CoinDesk:
"I believe this decision by the SEC today is a temporary detour on bitcoin's inevitable path that will sooner or later lead to every Wall Street and Main Street investor being able to participate in this promising technology of the future, and in parallel, adoption will continue apace for the disruptive, internet native, digital gold and electronic cash properties from which bitcoin derives its value."
Others, too, reflect on the decision in light of the digital currency's future. Dave Nadig, CEO of industry news site ETF.com, said he wasn't surprised by the SEC's move. In fact, he posited that bitcoin's unregulated nature is an inherent part of the digital currency.
"The decision isn't that surprising. Ultimately this is less about what bitcoin is or isn't, and is about the underlying market structure for bitcoin itself. If the SEC doesn't know where the buck stops on a security, it's hard for them to get behind it," he said, concluding:
"Honestly, the whole point of bitcoin is the buck never stops. It's unregulated by design."
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