News of the Winklevoss bitcoin ETF rejection by the US Securities and Exchange Commission (SEC) this week has been seen as a blow to bitcoins recent bull run.
The numbers would seem to back that up, with a bitcoin price drop of almost four percent immediately following the ruling, taking the cryptocurrency under the $8,000 threshold once again.
Statement of dissent
However, shortly after the Winklevoss bitcoin ETF rejection was announced, something interesting happened.
Dissent within the ranks.
Commissioner Hester M. Peirce issued a statement of dissent against the ruling of the SEC in the Winklevoss bitcoin ETF, claiming that “the Commission’s approach undermines investor protection by precluding greater institutionalization of the bitcoin market.”
She also went on to say that “more generally, the commission’s interpretation and application of the statutory standard sends a strong signal that innovation is unwelcome in our markets, a signal that may have effects far beyond the fate of bitcoin ETPs.”
This is an extremely valid point, but one that I absolutely was not expecting to hear from a Commissioner who had just been party to a ruling like we saw in the past 24 hours.
Peirce’s pointing out that “in disapproving the proposed listing, the Commission points to problems in the bitcoin market that I believe would be mitigated by institutionalizing the market—a phenomenon that bitcoin ETPs would foster” is bang on the money.
The Commission using certain problems that exist within the bitcoin market to reject the application, knowing full well that approving the application would go a long way to remedying the issues is merely creating a never-ending cycle where no progress can ever really be made.
There has to be a first step taken, and it has to come from the SEC because without the favorable ruling we most likely will not see the issues that are reason enough to prevent said ruling in some Commissioners eyes ever being dealt with to a satisfactory level.
Peirce continues –
“The disapproval order discourages new institutional participants from entering this market.
“Worse, it suggests that approval for bitcoin ETPs will come only when bitcoin spot and derivatives markets have matured substantially, yet, at the same time, contributes to further delay in their maturation, as potential institutional investors may reasonably conclude that the Commission will continue to repress market forces for the foreseeable future.”
So, while the Winklevoss bitcoin ETF rejection has undoubtedly dented the current bull run that bitcoin has been enjoying of late, it comes with something of a silver lining that has the potential to play an important role long after the dust from the initial ruling has settled.
Lover of all things crypto, blockchain and AI, professional tech scribe & part of the editorial team at Crypto Disrupt.