Market Experiences Flash Crash

Bitcoin ETF Decision Delayed

The market nearly set a new yearly low today as we bounced off the 240 Billion level.

Bitcoin once again fared better than most, only losing 2.5%, but it was a clearly a market flash crash in the later hours of the day that sold off 15 Billion in a matter of hours.

So what’s going on?

As we thought, the SEC has delayed the decision on the CBOE backed VanEck-SolidX Bitcoin ETF which is seen by many as the best hope for a approved exchange traded fund.

As the agency wrote:

“Accordingly, the Commission … designates September 30, 2018, as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.”

Read the full notice here: https://www.sec.gov/rules/sro/cboebzx/2018/34-83792.pdf

The proposed rule change from CBOE would, if approved, constitute a very important juncture for crypto. It would clear the way for the listing of a Bitcoin ETF, and would certainly enable the VanEck-SolidX Bitcoin ETF to be the first to market.

They submitted their proposal back in June, setting off a busy comment period that saw the crypto community rally in support. While today’s decision certainly pushes back against anyone who believed that the Bitcoin ETF was inevitable, this is not the end.

This comes after a presentation to the SEC by startup SolidX in late July was recently revealed.

The presentation argued that the approved commodity-trust exchange-traded products (ETPs) all have been “well-established, significant, regulated markets” for trading futures on the underlying commodity such as gold and silver.

With that being said, the presentation made it clear that “significant changes” in Bitcoin and its market structure have been made in the past few years. For example, multiple derivatives markets are now available for Bitcoin such as CME & CBOE Bitcoin futures.

Canaccord, the biggest investment firm in Canada, has said that the approval of a Bitcoin ETF is highly unlikely in 2018:

“And although the VanEck SolidX Bitcoin Trust, seen by many as the most formidable candidate for a potential approval, is due for a potential decision as early as this month, it is largely believed that the SEC will extend its deadline, in which case a decision may not be made until March 2019. Meanwhile, we note that other bitcoin-based securities (e.g., Bitcoin Tracker One) have been available for trading on regulated exchanges as early as May 2015 in Sweden, while north of the border, Canada is working towards its own bitcoin ETF product, the Evolve Bitcoin ETF.”

This is a sentiment that starting to spread amongst the crypto community. After all, the reasons the SEC gave for denying the Winklevoss ETF, namely market manipulation and volatility, will not go away overnight.  

However, Canaccord emphasized that due to the history of VanEck and CBOE in dealing with regulated U.S. markets and the U.S. SEC, their Bitcoin ETF are the most likely to be approved by the SEC.

The proposed ETFs have full insurance, guaranteed secure storage for investors, and most importantly, do not depend on a single crypto exchange for valuation, which is one of the primary reasons that the Winklevoss Bitcoin ETF was rejected.

I think this should be your takeaway from today’s events: Crypto is growing up, and simply because we have to wait longer for an ETF does not mean that we aren’t moving forward.

This year especially big companies in the cryptocurrency sector, including Coinbase and Ledger, have focused on developing a suite of institutional products to enable large-scale institutional investors in entering the cryptocurrency market.

Just today Coinbase announced that they would be enabling instant deposits, so funds are immediately in your account instead of having to wait a week.

The custodial services offered by an increasing number of companies is what is going to continue to attract institutional players to the space. Today’s decision does nothing to take away from the recent announcement of the Bakkt platform and how it will help to open up the crypto market for large funds.

“The arrival of a potential bitcoin ETF remains top of mind for institutional investors seeking exposure to this emerging asset class, and there are now multiple applications pending approval by the SEC, most notably that proposed by Van Eck/SolidX. In addition, institutional custody continues to make progress, as Ledger announced a partnership with Nomura and Global Advisors during the Consensus conference in May and Coinbase launched its institutional custody product in early July,” Canaccord researchers added.

As I’ve said before, it is imperative that we focus on the underlying technology and developing the market structure instead of getting hung up on the details of this ETF.

The ETF is only a piece of the larger whole we aim to build. There are exciting days ahead for those who can hold through days in the market like today.

If you were not able to join us for the recent webinar “Ten Steps to Building Your Portfolio” webinar, the replay is available here.

We’ve started to produce episodes for The ReadySetCrypto Podcast; all of our episodes are posted on our blog (and on iTunes) and episode eight is now available. Episode Eight is an interview with Andrei Polgar, the author of the book “Age of Anomaly” which speaks to anticipating negative market events. Look for more episodes shortly as we comb the crypto space for valuable interviews, and create valuable content to keep you in the loop!

See you tomorrow!

Our next Premium-Only Livestream is scheduled for 8/8/2018 at 8 PM EDT (UTC/GMT -4 hours)

New to Cryptocurrencies? Check out our archived classes “Intro to Cryptocurrency Trading”, “How to Find Your Next Big Cryptocurrency: Intro to Fundamental Analysis,” Mav’s  class on “Security and Wallets” and Doc’s classes, “Introduction to Technical Analysis” and “Short Term Trading Strategies” which are now all available for immediate purchase in our Store, and seconds away from viewing in the Premium Member’s Home. View more about them at our online store by CLICKING HERE.

Didn’t catch our “Building Your Portfolio” Webinar from mid-June? Listen here.

Sign up for our NEW Telegram channel by clicking here!

Watching on Mobile? Click this link to watch in HD

Check out our BLOG for the latest videos, posts, and Podcasts! Click this link and bookmark the page!

If you go to buy any of our courses at our online “store” you can receive $10 off the street price with your member’s “coupon code” of member18crypto

Check out our new merch store! Simply go into the regular store and select “Merchandise” to pick up some RSC merch!

Defensive Actions for the next trading day: 

• None.