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Bitcoin Price Jumps Slightly As US SEC Considers ETF Proposal

October 24, 2018 at 18:50 by Arathur Stephen

The price of Bitcoin continues in a range-bound zone this week following large swings that were experienced early in the month. On October 10, 2018, the price dropped from $6,525 and reached a low of $6,030.

A week later, the price rose from $6,170 to a high of $6,720. This has become the biggest intraday change in months.  Shortly after that, it fell to $6,325. Since then, the price has been largely unmoved.

Today, Bitcoin price jumped lightly and is now trading near $6,605 mark as at 06:45 GMT, with the 24 hours volume of $230 million. According to the CoinMarketCap data, the virtual coin has a market capitalization of $113 billion.

US SEC Considers ETF Proposal

The newly appointed Commissioner with the US Securities and Exchange Commission (SEC), Elad Roisma has met with the top representatives from money manager VanEck and blockchain startup SolidX earlier this month to talk through their Bitcoin-based Exchange Traded Fund (ETF) proposals. Also present at the meeting were representatives from the Chicago Board Options Exchange (CBOE), which will list the ETF.

In the presentation shared with Roisman by VanEck, the company noted that it had started working on the ETF since 2015. After the initial rejection of ETF proposal by the SEC in 2015, the firm went on to tweak it based on the issued guidelines. Nevertheless, the ETF proposal was rejected again in 2018 even with the tweaks.

The presentation notes that if the ETF gains their approval, its price will comprise 25 bitcoin per share of the VanEck SolidX Bitcoin Trust and will cost roughly around $200,000. This shows that it is targeted at large institutional investors and not retail investors.

Additionally, as the CBOE Bitcoin ETF is supported by physical Bitcoins, the ‘Trust’ holding the BTC tokens will be insured completely against any theft or loss of virtual currency.

The proponents further highlighted that the funds would price shares based on data available from Over-The-Counter (OTC) trading desks. These desks are under the supervision of the US Commodity Futures Trading Commission (CFTC) and compliant with several regulations like AML/KYC/BSA. It ensures that they are “not subject to manipulation in the absence of misconduct by the trading desks themselves.”

Reasons Why SEC Bitcoin ETF Approval Is Imminent

It is likely that the SEC will give their blessing to the proposal by VanEck as approval confidence for a Bitcoin ETF is very high. One of the reason is due to the reputation the company has built over the years. The firm has over $48 billion in assets under their management and it runs some of the industry’s biggest ETFs.

In addition, SEC Commissioner, Kara Stein, who has repeatedly kicked against cryptocurrency-based ETFs, is set to vacate her role in December 2018. She will be replaced by democrat Allison Lee, which could be a potential opening for the ETF approval.

The Abacus Journal stated:

The VanEck ETF is perfectly approvable if you have been reading the tea leaves in the rejection language at the SEC connected to previous submissions. Approval will probably come with a bunch of dissenting language amongst the respective approving members, but it will still get approved. Not backing down in any way.

Nevertheless, there is no clear evidence that proves that the ETF will attract demand from institutional investors.

BTCUSD Technical Forecast

BTCUSD price has continued in a sideways trend. The strong bearish pressure within wants to ensure that the price makes a new low of $6,524 on October 23, as against the low of $6,535 on October 22 at the support zone.

The price then reversed within the range with the bullish formation at $6,540. Before the end of the trading session, the price of Bitcoin was up at $6,580 in the resistance zone. Nevertheless, temporary declines against further upward price movement occurred at the 50 Exponential Moving Averages (EMAs). Relative Strength Index (RSI) are horizontally flat showing a sideways trend.

The 100 Simple Moving Average (SMA) line is below the long-term 200 SMA line which indicates that the path of least resistance is towards the downward direction. That is to say, the bearish breakout is more likely to gain traction than to reverse.

Nevertheless, if the price of Bitcoin fails to hold the $6,500 support, then a downward slide towards the October 11 lows of $6,220 might be seen. Also, even more, losses could be expected below this level.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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