U.S. SEC Sets 29 December 2018 As New Deadline for Decision on VanEck-SolidX Bitcoin ETF

On Thursday (20 September 2018), the U.S. Securities and Exchange Commission (SEC) announced that it needed more time to make a decision regarding the VanEck-SolidX Bitcoin ETF, and it set 29 December 2018 as the new deadline.

Via a notice published on its website, the SEC said that on 20 June 2018, Cboe BZX Exchange (BZX) had filed with the SEC "a proposed rule change to list and trade shares of SolidX Bitcoin Shares issued by the VanEck SolidX Bitcoin Trust", which got published in the Federal Register on 2 July 2018.

Since the SEC had 45 days from the date of publication in the Federal Register to make a decision, it could have wait till 16 August 2018 to make an announcement. However, as covered by CryptoGlobe, the SEC decided on 7 August 2018 to exercise its right to extend this deadline by another 45 days to 30 September 2018 so that (in the words used by the SEC in this latest notice) it would have "a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change."

This is the language used by the SEC to announce today's extension of the deadline for making a decision:

This order institutes proceedings under Section 19(b)(2)(B) of the Act to determine whether to approve or disapprove the proposed rule change.

According to the Section 19(b)(2)(B of the Exchange Act, the new deadline is 180 days after the date of publication of the proposal in the Federal Register, which means 2 July 2018 + 180 days, or 29 December 2018.

Jake Chervinsky, who is an American lawyer (an associate at the law firm of Kobre & Kim), once again, brought his excellent analysis and commentary skills to Twitter:

According to Chervinsky, the SEC must make another announcement by 29 December 2018. It could then delay for another 60 days until 27 February 2019, and "that would be the absolute final deadline."

Gabor Gurbacs, the Digital Asset Strategist/ (and Director) at VanEck/MVIS, had this to say about today's announcement:

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Notable Bitcoin Trader and Whale Not Bullish on the Hyperinflation Narrative

Colin Muller

Highly regarded Bitfinex trader and crypto whale J0E007 is not banking on the hyperinflation narrative, which is a highly popular notion in the cryptoasset industry, implying it's a fairy tale.

Screenshot from 2020-05-26 13-23-22.png(source: Bitfinex pulse)

This narrative, exhibited for example here, proposes that the aggressive fiscal and monetary intervention on the part of many central banks around the world will eventually lead to sharp devaluations in the values of many fiat currencies—and most importantly of the U.S. dollar.

Propagation of this concept of rampant fiat inflation in the cryptoasset space is generally tied to predictions of a huge increase in the price and/or market capitalization of Bitcoin and other cryptos, although most focus on the flagship cryptocurrency.

A Little More Complicated

In his post, JOE007 linked to a recent report from Alhambra Investments, an asset management and financial research outfit.

The report details lead analyst Jeffrey Snider’s view that the dollar is not going anywhere in terms of demand, although definitely not by virtue of the competence of the U.S. Federal Reserve in handling the unfolding economic crisis lit by COVID-19.

Conceptually, first, any strong desire to hold expensive dollar liquidity buffers is drawn from serious mistrust of systemic conditions – including the central bank’s place in them. If you thought Jay Powell well prepared in advance with effective countermeasures standing at the ready, buffers of any size need not apply.

Jeffrey P. Snider

In short, Snider contends that the Fed under chair Jay Powell has not responded appropriately to the emerging crisis with “effective countermeasures at the ready”; and this bungling in turn has led to a higher international demand for US dollars in order to sit on a larger and safer cushion of “expensive dollar liquidity buffers.”

A complicated subject, to say the least. The upshot for J0E007 being that the dollar-collapsing narrative may have some big holes in it—removing the keystone of that popular Bitcoin use-case narrative.

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