Crypto Markets Cheer As Commissioner Hester Peirce Announces That SEC Will Review August 22nd Decision to Reject 9 Bitcoin ETFs

On 23 August 2018, one day after U.S. Securities and Exchange Commission (SEC) staffers rejected (via three disapproval orders) a total of nine Bitcoin ETFs proposals from ProShares, Direxion and GraniteShares, SEC Commissioner Hester Peirce (the only Commissioner who dissented from the decision last month to reject for the second time the Winklevoss Bitcoin ETF) announced that the SEC has "stayed" (or put on hold) these orders, and that it is going to review these disapproval orders.

She announced the news (around 20:26 UTC) via the following tweet:

The link in this tweet is to a letter sent by Brent Fields, the SEC's Secretary, to Eugene Schlanger, Counsel for NYSE Group. This letter, which has to do with the rejection of the five Bitcoin ETFs from Direxion, contains the following important paragraph:

"This letter is to notify you that, pursuant to Rule 43 1 of the Commission's Rules of Practice, 17 CFR 201.431 , the Commission will review the delegated action. In accordance with Rule 43 1 (e), the August 22 order is stayed until the Commission orders otherwise."

Two other similar letters, with regards to the Bitcoin ETFs from ProShares and GraniteShares, were also sent out: the ProShares letter was sent to NYSE Group just like the Direxion letter (but this time to David De Gregorio, Senior Counsel); and the GraniteShares letter was sent to Kyle Murray, Assisant General Counsel for Cbloe Global Markets

The Direxion and the ProShares letters were sent to the NYSE Group because in these two cases, the proposed rule changes came from NYSE Arca ("the top U.S. exchange for the listing and trading of exchange-traded funds"), which was going to be the exchange to list and trade the shares of the Direxion and ProShares ETFs. The GraniteShares letter was sent to Clobe Global Markets because for those two ETFs, the proposed rule change to list and trade their shares came from Cboe BZX (an exchange that is part of Cboe Global Markets).

Less than an hour after her first tweet, Commissioner Peirce sent this follow-up tweet:

It is not clear how long the Commission's review of the delegated actions will take, with all three letters ending with the following sentence:

"The Office of the Secretaty will notify you of any pertinent action taken by the Commission."

The reply to this tweet by former SEC Commissioner Michael Piwowar (who resigned last month) was quite interesting:

American lawyer Jake Chervinsky (who has been providing excellent commentary on decisions of the SEC regarding Bitcoin ETFs) agreed with Michael Piwowar, and made the following comment on Twitter:

"Don't get too excited, folks. Under Rule 431 of the SEC's Rules of Practice, it only takes a single Commissioner to order a review like this. @HesterPeirce deserves credit & respect for putting up a fight, but there's no reason to think yesterday's rejections will be reversed."

What Chervinsky is referring to is Rule 431 ("Commission consideration of actions made pursuant to delegated authority"), which you can learn more about in the SEC's "Rules of Practice" document.

As for how a futures-based Bitcoin ETF could cause the BTC price to go up, Twitter user "Nik Bhatia" offered one potential scenario: 

The return of hope of a Bitcoin ETF getting approved this year has caused crypto markets to rejoice, with Bitcoin, according to data from CryptoCompare, breaking the $6,500 resistance level, surging to an intraday high of $6,558 around 22:00 UTC, and currently (as of 22:20 UTC) trading at $6,542, up 2.7% in the past 24-hour period.

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Bitcoin’s 90-Day Active Supply Points to Bullish Phase Ahead: Report

Michael LaVere
  • New Stack Funds report found bitcoin underwent a surge in its 90-day active supply, pointing to a bullish phase ahead.
  • Bitcoin's 90d % has returned to pre-2017 bull run levels, indicating holders are switching to a long-term investment strategy.

Bitcoin’s 90-day active supply has reached its pre-2017 bull run level, pointing to a possible bullish phase in the cryptoasset’s future. 

According to a report published by digital asset manager Stack Funds, bitcoin ended Q2 2020 on a strong note, with holders continuing to consolidate and adopt a long-term investment strategy. The report claims bitcoin underwent a surge in its 90-day active supply over the last quarter, which serves as an indicator for the sentiment cycle of coin holders. 

The report reads:

Prior to the 2017 and 2019 bull run, where Bitcoin hit $20,000 and $14,000 highs against the dollar, there was evidence of steep surges in the 90d % active supply [...] These occurrences tend to peak for a window of 60 - 90 days, before Bitcoin’s induced price rally is realised.

Stack Funds continued, saying the spike in active supply has historically pointed to a run-up in bitcoin prices, which the authors believe “could happen sooner rather than later.”

The report also found a general tapering in bitcoin’s 90-day active supply over the past three years, suggesting that investor’s time horizon has lengthened, with investors holding BTC over longer periods. The authors claimed it has become apparent that investors are “accumulating the digital asset with expectations of a potential price increase.”

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