Bitcoin ETFs: So What’s the Hold Up?

Published on: 19 Sep 14:44

In our last blog post, we discussed Bitcoin ETFs. Now, Bitcoin ETFs are not a “thing” just yet, that is to say, they don’t exist yet. They are just an idea. However, like all good ideas like the computer and the cell phone, we do see Bitcoin ETFs in the future. So what’s the hold up?

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THE HOLD UPS FOR BITCOIN ETF CREATION

The SEC

The SEC, or the Securities and Exchange Commission, has authority in the United States over all financial products and instruments, and they oversee the stock exchange. Bitcoin qualifies as a security since it meets three criteria set forth by the Howey Test, which originates from a 1946 Supreme Court ruling. The proposed Bitcoin ETF is:

  1. An investment of money.
  2. In a common enterprise
  3. With the expectation of profits

The SEC has banned all proposed SEC’s ETFs from coming to fruition, saying that Bitcoin itself is not valid, mainly due to the threat of fraud and market manipulation. With an unregulated market, the SEC is hesitant to allow this product in a largely untested market. However, if a market did develop for Bitcoins that was more secure and mainstream, a Bitcoin ETF would probably be approved.

Currently, those who want to invest in Bitcoin and other cryptocurrency instruments are investing elsewhere, usually overseas in unregulated markets, which carries even a greater risk than in the United States.

SIGNS OF HOPE

Recently, a new fund that gives investors a way to invest in Bitcoin began trading on an alternative trading system regulated by the SEC. This fund is similar to an ETF, but is not considered as such since it is not trading on a national exchange. However, this is an important step in the progress of cryptocurrency and getting cryptocurrency more accepted as a medium of exchange.

WHERE CDUEL STANDS ON BITCOIN ETFS

cDuel believes it’s only a matter of time before Bitcoin and all cryptocurrencies are accepted by the mainstream. The SEC, however, is postponing this acceptance with its repeated rejections of cryptocurrency. However, when something works, nothing will stop its growth and development no matter the naysayers. cDuel believes cryptocurrency is here to stay, and we’ll see Bitcoin ETFs at some point as a great investment for users.

In the meantime, head on over to cDuel’s free cryptocurrency trading simulator game. Here, you can practice your Bitcoin trading skills, as well as your other cryptocurrency trading skills, in a risk-free environment. This is a great place to learn more about cryptocurrency and hone your skills for when financial instruments such as Bitcoin ETFs are approved. Sign up today!