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SEC Delays Ruling On Bitcoin ETF, Targets Potential Manipulation

Investors who are eager to use simple exchange traded funds (ETFs) to tap into Bitcoin price swings — presumably its ups more than its downs — were let down by the SEC, again.




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The Securities and Exchange Commission postponed yet again a decision on whether to green light or kill a VanEck Associates proposal for opening a Bitcoin ETF.

VanEck is an operator of mutual funds and exchange traded funds.

U.S. investors can trade Bitcoin and other cryptocurrencies several ways, many indirectly. But perhaps ironically Bitcoin remains hard to access through funds, which are intended to make investing easy.

Bitcoin Price Expert Now Chairs SEC

Many investors were hopeful earlier this year that the regulatory agency, with Gary Gensler as chairman, would be receptive to a proposal for a fund devoted to the controversial cryptocurrency. Before his January appointment to the SEC, Gensler taught and researched at MIT’s prestigious Sloan School of Management.

Much of his work focused on issues related to Bitcoin and Bitcoin price potential — blockchain technology, digital currencies, financial technology and public policy.

The watchdog agency put off a ruling on VanEck’s application in April. In its new postponement, the SEC said it would seek public comment on parts of the VanEck proposal.

ETF Application From Cboe

Technically, the VanEck proposal comes from the Cboe BZX Exchange, which seeks approval for listing the VanEck Bitcoin Trust ETF.

SEC invited public comment on the potential for market manipulation of Bitcoin price. What about a Bitcoin ETF? The agency also asked the public to comment on whether regulation of the Bitcoin market had changed in the past five years.

Bitcoin ETF applications first attracted popular attention in 2016.

SEC Asks For Public Comment

The SEC also asked the public to comment on whether such a fund would be adequately liquid. What does the public think about the transparency of the Bitcoin markets, the SEC asked.

Gensler led the Commodity Futures Trading Commission under the Obama administration.

The SEC gave the public 35 days from its June 16 filing to respond. The watchdog can extend its review period up to 240 days.

Bitcoin price was pegged at more than $37,700 on Thursday, according to coindesk.com. Bitcoin price peaked above $63,000 in April.

It began this year below $30,000.

Follow Paul Katzeff on Twitter at @IBD_PKatzeff for tips about retirement planning and active mutual fund managers who consistently outperform the market.

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