There was great excitement in the world of cryptocurrency Bitcoin, with a big decision being made on the first attempt to launch a Bitcoin ETF (Electronically Traded Fund).
The US Securities and Exchange Commission has said it will rule on the £100m bid from Winklevoss Capital by March 11th – which is this Sunday. The decision was made on Friday 10th March.
If the bid was accepted, the price of Bitcoin as a currency is expected to spike. Since the bid is not accepted, there is expected to be a slump in value. Some commentators say that the news is already priced into the market, and accounts for the continued push in USD value towards the $1300 threshold over the last weeks.
Winklevoss Capital is owned by ex-Olympic rowers and internet entrepreneurs Cameron and Tyler Winklevoss, who have been trying for three years now to get a Bitcoin ETF off the ground.
As with ETFs in other commodity markets, the goal of the Winklevoss scheme is to allow any consumer to invest in Bitcoin over the long-term without actually having to buy and sell in the marketplace.
Industry estimates put the chances of the ETF bid going through at roughly 50:50. But one hedge fund, Global Advisors Bitcoin Investment Fund (GABI), has temporarily reduced its Bitcoin position, believing that, if the bid does not go through, “the market will be short of a catalyst and will have trapped some overly optimistic long positions.” In the future, though, GABI analysts see “a very protracted rally” for Bitcoin – regardless of the outcome.
Some online trading platforms are offering extended weekend trading hours to accommodate the expected surge in activity.
And trading platform BitMEX allows traders to bet using Bitcoin on whether the ETF Bitcoin bid will be successful. BitMEX CEO Arthur Hayes says he has “heard good arguments for and against the ETF being approved. At this point it is a coin toss.” Its too bad that the decision didn’t go in favor of ETF.