popularity previous year - prompting coin prices to hit more than $19,000 - the total market cap of all digital currencies still pales in comparison to the $30 trillion market cap of the USA stock market. Shortly after, Bats submitted a petition to review that decision, triggering another wave of comments - and expectation - about the agency's willingness to approve a cryptocurrency exchange-traded product.
That news sent the markets into a tailspin, as many analysts took it as an omen that the SEC is unlikely to approve any of the manifold cryptocurrency ETF applications now pending at the agency.
"An ETP based on bitcoin would offer investors indirect exposure to bitcoin through a product that trades on a regulated securities market and in a manner that eliminates some of the frictions and worries of buying and holding bitcoin directly".
In a 92-page opinion on Thursday, the commission said it rejected an argument from the twins that "intrinsic properties of bitcoin and bitcoin markets make manipulation 'difficult and prohibitively costly'". "Because authorized participants could compose their baskets with bitcoin obtained from any source, the availability of the ETP would bring prices at different exchanges closer together".
With many suspecting that the current mini-bull run is largely motivated by anticipation surrounding the SEC's proposals from VanEck and SolidX - it is likely that investors took the rejection of the Winklevoss' ETF has a bad sign ahead of the SEC's decision - expected in mid-August.
"Although the Commission is disapproving this proposed rule change, the Commission emphasizes that its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment".
The move comes more than a year after the SEC turned down a rule change request from the Bats BZX Exchange that would have paved the way for the bitcoin-tied investment vehicle. This qualifier could indicate that the SEC may be receptive to a future bitcoin ETF if the right conditions are met and its host exchange can provide proof of sufficient market protections. She worries that "the Commission's interpretation and application of the statutory standard sends a strong signal that innovation is unwelcome in our markets". In this post, upvoted 6200 times, Peirce is introduced as "The SEC Commissioner who wants the ETF approved". Regulators even launched an investigation in May to check whether bitcoin price movement was manipulated or not.