Bitcoin Price Value Plunges After the SEC rejects the Winklevoss twins’ ETF

Bitcoin’s price was sent tumbling following the move by the Securities and Exchange Commission to reject a proposal by the Winklevoss twins to have an exchange-traded fund (ETF) attached to Bitcoin’s price. The decision on Friday saw the cryptocurrency plummet more than 16% in the immediate aftermath.

Following the ruling, Cameron and Tyler Winklevoss vowed to continue with their quest for the ETF. They have engaged with regulators for years and continued to tweak their proposal on a bid to make their vision a reality. In recent times, the brothers have acquired significant chunks of Bitcoin and made clear their desire to promote and bring the virtual currency into the mainstream.

Lack of regulation

BTCUSD Chart H4 on March 10 - 12, 2017The SEC’s argument was that the markets that trade in Bitcoin remain largely unregulated. This lack of regulation, according to the US regulator, opens the market to fraud or manipulation. The commission also found the proposal to be inconsistent with sections of the Exchange Act, particularly Section 6(b)(5) which requires any national securities exchange rules to protect investors from fraudulent or manipulative acts. Most Bitcoin are traded other countries, which makes it difficult for American regulators to have any oversight over the trade.

The rise and rise of Bitcoin

Since its emergence in 2009, Bitcoin has been celebrated for finding ways to circumvent the authority of governments. It is popular in countries like Venezuela and China, especially with citizens who want to avoid government oversight. Consumers worldwide have also used Bitcoin to shelter their assets from inflation or major political upheavals.

Volatile times for Bitcoin

In the weeks leading to the announcement, Bitcoin’s price had climbed sharply with many anticipating that the commission would approve the Winklevoss Brothers’ proposal. At one point a single Bitcoin was exchanging for over $1,300, a record high.

The virtual currency gained over 20% in the first week of 2017 before taking a heavy beating following reports that China was set to begin a crackdown on its trading. China went as far as blocking customer withdrawals and charging a fee of 0.2% for every transaction. These reports caused Bitcoin to crash 35%. The cryptocurrency recovered from the developments in China, rallying more than 30% in the past month leading to the Securities Exchange Commission announcement. Traders had expected the SEC to approve at least one of Bitcoin’s three ETFs.

Bitcoin’s majestic rise saw it rally 120% last year. It has also been the best performing currency in the last two years. Despite Friday’s setback, Bitcoin is still about 10% higher this year.

Big blow for Bitcoin

An ETF, according to Bitcoin aficionados, would have helped catapult Bitcoin into the mainstream and made it available to all investors, including retail investors. The commission concerns about Bitcoin’s unregulated markets have dashed any hopes of an approval in the near future.

Bitcoin’s impressive concepts

Most of the large financial institutions have shied away from investing significant amounts into Bitcoin, due to the many regulatory questions around it. But those same institutions have shown their admiration for the technological concepts that Bitcoin has introduced. One example is the blockchain, which is a new way to track all kinds of information.

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