A day after the SEC announced that the VanEck Bitcoin ETF had been pulled the chairman, Jay Clayton, has expressed his concerns about Bitcoin’s potential to be listed on a major mainstream exchange. Perhaps the writing was on the wall for the VanEck ETF after all.
Clayton said at the Delivering Alpha conference that Bitcoin would need to become better regulated before it trades on a significant exchange, putting a dent in the perception that Bitcoin was on its way to full legitimacy and normalization.
The cryptocurrency space certainly has come a long way in a short space of time in terms of its adoption and usage. However, Clayton’s assertions are rooted in long-standing concerns with the Bitcoin market that has played a role in the SEC’s reluctance to allow for a Bitcoin ETF.
Still persisting in the space are headlines of hacks across major cryptocurrency exchanges, violent price swings, allegations of market manipulation as well as malpractices from a number of projects. It has led to the SEC intervening in the ICO market, but there is still a lot that needs to be done.
“If [investors] think there’s the same rigor around that price discovery as there is on the Nasdaq or New York Stock Exchange … they are sorely mistaken,” said Clayton, ominous. “We have to get to a place where we can be confident that trading is better regulated.”
That being said, there have been advances towards mainstream investing for Bitcoin as, in December of 2017, the cryptocurrency debut on CME and CBOE as a futures offering. This type of trading has picked up much interest with CME looking to the SEC to allow for a doubling up on the number of investor contracts.
This fact, however, actually plays into what Clayton is saying as in these futures contracts the institutional investors do not trade actual coins, but rather bet on the market while keeping away from the hazards that it has become infamous for.
These comments from Clayton seem to be driving home a nail in the Bitcoin coffin when it comes to the next step in its institutional trading ladder. Bitcoin ETFs remains a goal for many in the space, but despite multiple applications, the target does not seem any more achievable.
VanEck was seen as a potential successor in front of the SEC, but its withdrawal does not spread optimism. Additionally, the state of mind of the SEC does not seem to have changed much in over three years now.