Bitwise Head of Research Optimistic That SEC Will Approve Bitcoin ETF

Neil Dennis

Investors will know on Monday, October 14 whether the U.S. markets regulator will grant approval for a bitcoin exchange-traded fund (ETF), and the Head of Research of Bitwise Investments is confident his company's product will get the go-ahead.

The Securities and Exchange Commission's (SEC) October 13 deadline for approving the Bitwise Bitcoin ETF Trust comes at a time when volatility has returned to the bitcoin market - falling more than 20% during one week in September - after several months of relative stability.

Volatility has been an important factor in the SEC's reluctance to approve bitcoin ETFs and will figure highly in its final deliberations as it continues to seek to "protect investors and the public interest". The SEC has delayed making the ultimate decision several times, citing concerns over price manipulation and a lack of clear custody.

Bitwise is Hopeful

Despite the SEC repeatedly delaying its decision on the Bitwise EFT since the application was filed in January, Matt Hougan, Bitwise's Head of Research, appeared confident it would gain approval when interviewed on CNBC's ETF Edge segment. He said:

We're closer than we've ever been before to getting a bitcoin ETF approved.

He immediately addressed the custody issue, saying the evolution of the bitcoin market over the past two years was "from night to day". He said:

Two years ago, there were no regulated, insured custodians in the bitcoin market. Today, there nearly 10. There are big names like Fidelity and CoinBase. They have hundreds of millions of dollars of insurance from firms like Lloyd’s of London.

Disappointment Along The Way

Hougan's optimism has not been shared by all applicants to list a bitcoin ETF, however. In September, the Cboe BZX Exchange withdrew its application, filed in January 2019, to list the VanEck SolidX Bitcoin Trust ETF.

Just days earlier VanEck Securities and SolidX Management announced they were, instead, pursuing a more limited option - issuing shares in a similar bitcoin trust that would be sold to institutional investors only.

Twins Cameron and Tyler Winklevoss started their quest to list bitcoin ETF shares started six years ago, but they said in an interview earlier this year that they "remained committed" to the process.

Making Bitcoin Investment Safe

Hougan has also remained committed to getting a bitcoin ETF up and running, saying that his aim is to allow smaller retail investors a way to participate in "one of the most exciting wealth-generation opportunities in the world". He added:

What the bitcoin ETF would allow everyday investors to do is have safe, simple, secure access to the wealth generation taking place in bitcoin and crypto. It would let financial advisors give it to their clients easily instead of them going rogue.

While the SEC's main concern remains the risks to small, retail investors, the regulator's commissioners appear to be softening towards the idea of a bitcoin ETF gaining approval. In September, chairman Jay Clayton said "progress was being made", but there remained "work left to be done".


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Argentina’s Smallest Currency Denomination Now Worth Only One Satoshi

Michael LaVere
  • Argentina's smallest currency denomination, the centavo, is now worth one satoshi.
  • The country is in the midst of a currency crisis, with the inflation rate reaching 50 percent. 

Argentina’s smallest unit of currency has slumped in value to now be worth the equivalent of one satoshi. 

The Centavo, which has been in circulation since 1854, has joined the Lebanese Lira and Vietnamese Dong in being the same value as the smallest denomination for bitcoin. 

The currency’s fall in value was noted by Argentinian Reddit user u/OneMoreJuan, who used the Centavo’s plight as an example to invest in bitcoin. Another user in the comments claimed that scrap material for the Centavo was now worth more than the coin itself.

Argentina is one of several South American countries to undergo hyperinflation and currency crisis in recent years, with the government defaulting on its loans a record nine times. The country entered its third year of recession prior to the start of the coronavirus pandemic, after undergoing an economic crisis that first began in 2018. 

According to a report by Bloomberg, Argentina’s inflation has outpaced expectations, with the current rate reaching roughly 50 percent. 

Argentinians have responded to the devalued fiat by turning to bitcoin and crypto-assets in droves. Data aggregator Coindance shows a significant spike in weekly LocalBitcoins volume for Argentinian customers since the start of the year, reaching as high as $70 million in May.

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