On Thursday, Fortune writer Jeff John Roberts examined the Securities and Exchange Commission’s decision to once again reject a bid to create an exchange-traded product for bitcoin, citing potential for market manipulation and a lack of liquidity.
The decision came as a result of a request from the Winkelvoss twins to revisit a March 2017 ruling with a similar outcome. While the SEC’s decision did have an impact on bitcoin trading, with the cryptocurrency falling around three percent in the hours after release of the news, the Commission’s comments regarding the rejection could paint a more optimistic picture of the cryptocurrency market moving forward.
“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 SEC noted in its 92-page decision.
Stoking this flame of optimism, SEC Commissioner Hester Peirce tweeted, “Apparently, bitcoin is not ripe enough, respectable enough, or regulated enough to be worthy of our markets. I dissent.”
Industry analysts believe that the SEC’s approval of an ETF could lead to increased liquidity and a rise in prices. Although concerns noted in the Thursday decision regarding potential price manipulation and a high volume of overseas trading will likely serve as a minor setback moving forward, the conclusion certainly leaves the door open for revisiting bitcoin exchange-traded products in the future.
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