Bitcoin price falls after Securities and Exchange Commission rejects ETF proposal
SEC highlight concerns over a lack of regulation in the world's bitcoin markets
by Abi Moses on 12th March, 2017
The value of cryptocurrency Bitcoin has plummeted after the Securities and Exchange Commission (SEC) rejected the Winklevoss twins' proposal for an exchange-traded fund (ETF).
In anticipation of the ruling, Bitcoin was trading at $1,300 but soon after the proposal was dismissed it dropped to nearly $1,000. A slight improvement has seen it close at $1,189.97. The SEC rejected the Winklevoss proposal after citing concerns over a lack of regulation in the world's bitcoin markets, as well as highlighting the potential fraud risk.
In the statement released, the SEC claimed "As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest"
"Based on the record before it, the commission believes that the significant markets for bitcoin are unregulated. Therefore, as the exchange has not entered into, and would currently be unable to enter into, the type of surveillance-sharing agreement that has been in place with respect to all previously approved commodity-trust ETPs — agreements that help address concerns about the potential for fraudulent or manipulative acts and practices in this market — the commission does not find the proposed rule change to be consistent with the Exchange Act."
The proposal was just one of three bitcoin seeking ETF approval, with traders still hopeful at least one of the other two will be approved. The latest blow is just the most recent setback in what has already been a volatile year for the cryptocurrency. Following on from a hugely successful 2016, in which bitcoin's value surged 120%, there was a further 20% gain within the first week of 2017. Rumours that China would crack down on trading caused a 35% slump, before it again rallied in the wake of the potential ETF approval.
Despite the latest blow, bitcoin is still trading 10% higher than at the start of the year. You can spread bet on all currencies and commodities using any of the partner brokers that Spread Betting have available. Visit our homepage today for more information.
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