Bitcoin Price Drops After Winklevoss ETF Proposal Rejected By SEC

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The Winkelvoss brothers helped to create Facebook with Mark Zuckerberg - who went on to monetize the social network. It's increased almost 30 per cent so far this year.

"Based on the record before it, the commission believes that the significant markets for Bitcoin are unregulated", the SEC said in a statement. For now, you can buy bitcoins on online exchanges, which often require an involved registration process and premium prices. If the SEC rules in favor of allowing Bitcoin to be publicly traded, this scaling problem could get even worse. This lack of regulation is an issue that will stay around either until bitcoin markets mature enough to implement regulations consistent with existing markets that trade other commodities or derivatives, or until the Exchange Act's laws are changed or altered to provide an exception for bitcoin.

Bitcoin still is in the early stages of its development, the SEC noted, adding that, "Over time, regulated bitcoin-related markets of significant size may develop". However, till date it has not been recognised by any government or central bank.

Bitcoins are basically lines of computer code that are digitally signed each time they travel from one owner to the next. If the fund passes muster with the SEC, investors should be relatively confident that it is structurally sound, says ETF Trends Editor Tom Lydon. They track a market index, a commodity, bonds or a basket of assets. We know that this sounds overly optimistic, but we want to remind readers that we suggested buying the dip after the Bitfinex exchange hack and when prices crashed down to around $600 just months ago. That said the current price point for the current is still above the $1000 per bitcoin, making it still one of the most valuable and fastest growing crypto-currencies in existence. If an exchange has sloppy security, or if someone's electronic wallet is compromised, the money can easily be stolen. Among them, he listed light trading volume, excessive hoarding, extreme price volatility, the difficulty of selling large blocks of bitcoin quickly, high risk of bankruptcy and market manipulation. That expected rise was likely priced into Bitcoin's price ahead of the SEC ruling, which would explain why a negative ruling led to a plunging value for the cryptocurrency.

At least two other requests for bitcoin ETFs are still pending with the SEC from Grayscale Investments and SolidX. Because it has failed to gain the kind of legitimacy that an ETF would offer, however, it has failed to gain widespread support and has been subject to rapid changes in value.



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