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Specialist in the cryptocurrency industry, lawyer Jake Chervinsky reminded his Twitter followers that US Securities and Exchange Commission (SEC)less than a week is left to make a decision on Wilshire Phoenix's application for the launch of a Bitcoin-linked exchange-traded fund (ETF). The decision should be made by Wednesday, February 26th.
“Despite the crazy overpayment by GBTC, the refusal is inevitable”- he wrote.
The SEC highlighted doubts about the cryptocurrency market in January 2018, which hindered the approval of the Bitcoin ETF before and after that:
- Rating - SEC wants ETF to track bitcoin priceon several exchanges, which would ensure fair pricing. Nevertheless, the regulator is still not sure of the reliability of the data on the spot cryptocurrency market itself;
- Liquidity - Although the daily trading volume of bitcoin is measured in billions of dollars, the SEC is still not sure about the liquidity of the market;
- Storage - Since the beginning of 2018, the custodial side of the cryptocurrency business has undergone qualitative transformations, due to which this aspect can already less affect the opinion of the regulator;
- Arbitration - There are many crypto exchanges, but about 10 are trusted. Closing one of them should not affect the arbitrage opportunities or price;
- Market manipulation - The SEC is confident that Bitcoin is subject to significant manipulation risks.
Thus, Chervinsky’s doubts are quiteunderstandable, because Wilshire Phoenix did little to address the issues the SEC has. He left his comment to the message of Blockforce Capital CEO Eric Erwin, who drew attention to the emergence of an overpayment on securities of the Grayscale Bitcoin Trust relative to the cryptocurrency spot market in 41% and, relying on this observation, urged the SEC to approve the ETF.
Chervinsky notes that the more likely candidates Bitwise and VanEck so far decided to take a break.
“I think no ETF in 2020”- he added.
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