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Bitcoin just went from a high of 1327.1926 to 995.9575 in the blink of an eye. Wow. Here is the actual SEC ruling. https://www.sec.gov/rules/sro/batsbzx/2017

Bitcoin just went from a high of 1327.1926 to 995.9575 in the blink of an eye. Wow. Here is the actual SEC ruling. https://www.sec.gov/rules/sro/batsbzx/2017/34-80206.pdf https://www.sec.gov/rules/sro/batsbzx/2017/34-80206.pdf From the ruling.... > First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated. > Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. I'm not sure I entirely understand if they mean that Bitcoin itself must be regulated or just that the SEC needs to see that the major exchanges are regulated. If its the former, then I think this is game over, if its the later then............hmmm I really don't know. Can someone more knowledgeable inform me here? EDIT Having gone through the ruling it looks like they have a few reservations. 1) Most of the bitcoin trading happens on unregulated markets 2) Most of the volume happends in China and not the us and is therefore hard to regulate. 3) The ETF is tied to the Winklevoss own Gemini exchange which has little volume and often inferior pricing to other more liquid exchanges. 4) They bring up the lack of a liquid futures market, though I'm not sure this is really a concern. EDIT2 Rats, I've somehow confused myself into duplicating this comment across two threads:(

JumpCrisscross 10y ago
I looked at launching a Bitcoin ETN a few years ago. The problem is, for any exchange-traded product to work, you need a clear index it's designed to track. For stocks, those data are reliably available in exchanges' data feeds. For commodities and FX it's a bit trickier, since people can trade these without reporting their trades, but the presence of healthy spot and futures markets is a reliable enough reference to prevent most shenanigans. With Bitcoin, there is no trusted price. Each exchange reports its own price according to its own process and methodology. Not only could those be manipulated, but the price between them diverges from time to time. This raises a problem for an ETP manager. When redeeming units, which price should be used? How do we trust those prices aren't being manipulated? Ultimately, I found these issues impossible to resolve. This decision by the SEC seems like the right one.

JumpCrisscross 10y ago

I looked at launching a Bitcoin ETN a few years ago. The problem is, for any exchange-traded product to work, you need a clear index it's designed to track. For stocks, those data are reliably available in exchanges' data feeds. For commodities and FX it's a bit trickier, since people can trade these without reporting their trades, but the presence of healthy spot and futures markets is a reliable enough reference to prevent most shenanigans. With Bitcoin, there is no trusted price. Each exchange reports its own price according to its own process and methodology. Not only could those be manipulated, but the price between them diverges from time to time. This raises a problem for an ETP manager. When redeeming units, which price should be used? How do we trust those prices aren't being manipulated? Ultimately, I found these issues impossible to resolve. This decision by the SEC seems like the right one.