In an unexpected turn of events the SEC has denied Bitcoin’s ETF proposal filed by the Winklevoss twins. In the released statement, the agency claimed that Bitcoin’s markets weren’t regulated enough and that exchange wouldn’t be able to enter the appropriate “surveillance-sharing” agreements because of the cryptocurrency’s nature. Bitcoin’s market reacted sharply to the statement as the price dropped over 20% in a matter of minutes.

The Winklevoss twins have been waiting on the SEC’s approval of their ETF for nearly 3 years. The proposal has been delayed multiple times and each time a few changes were required. It seems that no amount of changes to the proposal could have changed the SEC’s decision, as they claim that “the Commission believes that the significant markets for bitcoin are unregulated”. While most of us may disagree with that statement, at the end of the day the SEC has the final say.

While this ETF has been disapproved, there are still others that are waiting a decision. We can only hope that by the time the other ETF’s decisions approach, the Bitcoin market would be regulated according to the SEC’s standards. The BitMEX contract which allowed users to be on whether or not the ETF would be approved reach as high as 60%. This goes to show that traders didn’t expect the SEC to deny the ETF.

Bitcoin’s price dropped from a high of $1290 to a low of $975 in a matter of minutes. While the approval of the ETF would have exposed Bitcoin to major investors, the fact that it was disapproved goes to show that there is still work to be done. China is cracking down on cryptocurrency regulation which may be what the SEC wants to happen before they can approve the fund.

Unlike other ETFs, Bitcoin is a global asset, so the SEC wants to make sure the Bitcoin markets are regulated all over the world not just in the US. Their statement claimed that “the exchange must have surveillance-sharing agreements with significant markets”, it seems that the agency might be waiting for China to regulate its market before thinking about approving the ETF.

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