US American SEC rejects first Bitcoin ETF. Then another.

By Dr Michael Jünemann, Johannes Wirtz


Bitcoin remains one of the hottest topics on the financial markets. No matter the regulators’ (and at times the banks’) resistance, Bitcoin are en-vogue to a point where a recent study from the Imperial College London attested cryptocurrencies to be an established store of value.

By the End of July, the application of the Winkelvoss brothers to list a Bitcoin ETF at Chicago Board Options Exchange (CBOE) was dismissed. On 7 August, SEC rejected yet another possible listing.

US-American regulator SEC said, in a 92-page statement, it was not convinced by CBOE’s arguments to list the trust let alone that Bitcoin markets are inherently protected from manipulation. SEC also questions the storage options and safeguarding of Bitcoin.

Investors, not just in the United States, undeniably have both a significant interest and access to cryptocurrencies as well as crypto funds as unregistered financial products. They increasingly lose their patience with the regulators in major economies around the globe. The SEC confirms, Bitcoin and Blockchain serve as a driver and comes with a value for innovation, but contradictory denies the products to be traded on a regulated securities market with effective securities laws and thus oversight.

Presumably on 30 September 2018, SEC will decide on the next application to allow Bitcoin ETF issued by Van Eck and SolidX. But as far as anyone can predict, 2018 will not be the luckiest year for the Bitcoin.

On the German market, no Bitcoin or other crypto currency funds have yet been established. While in 2018 a crypto fund has been launched in the form of an open-end special-AIF (alternative investment fund) it was open for professional investors in Liechtenstein only. There are however still many unanswered questions concerning crypto funds on the German market. How the depositaries shall safeguard crypto currencies or how to determine their market value remains to be seen. Nevertheless, there are possible ways to create Germany’s first crypto fund.