Bitcoin held most of Monday’s 13% surge as traders took in their stride another delay by US regulators to approve a bitcoin exchange-traded fund.
The most-liquid cryptocurrency fell 2.3% to $7 821 as of 7:38 am Tuesday in New York. The token mostly traded in a narrow range, while the Bloomberg Galaxy Crypto Index was little changed.
Speculation that Cboe Global Markets Inc.’s proposal may win a green light had filtered through crypto Internet sites in previous days as bitcoin rallied to within 2.5% of its one-year intraday high of $8 594. The digital asset has more than doubled during 2019.
The SEC on Monday asked for additional comments on Cboe’s plan to list an ETF from VanEck Associates Corp. and SolidX Partners Inc. The delay does not “indicate that the Commission has reached any conclusions with respect to any of the issues involved,” the regulator said.
Cryptocurrencies have been a hot potato for regulators partly because of their anonymous ownership and consumer complaints of scams. In the UK, some 1 500 reports of supposed fraud were tallied last year by the Financial Conduct Authority and Action Fraud, the national reporting centre for fraud and cybercrime.
The Washington-based SEC pointedly asked respondents to comment on issues central to avoiding price manipulation and fraud, such as their views on how the ETF’s price will be determined. Promoters plan to use a “proprietary, non-public methodology that uses the privately reported bid/ask spreads of an unidentified set of US-based market-makers in the OTC marketplace,” the SEC said.
“We continue the hard work towards better-regulated, safer and more liquid digital assets markets,” Gabor Gurbacs, VanEck’s director of digital strategy, tweeted after the SEC announcement. “Bitcoin is too big to ignore.”
The SEC set a 35-day period for additional comments.