US SEC nixes Bitcoin EFT chances

An attempt to have Bitcoin listed for public trading has failed

Three years of attempts to list Bitcoin ETF have failed, causing a drop of over 15% in value. Two investors, Cameron and Tyler Winklevoss, have been trying tirelessly to have Bitcoin listed officially. The US Securities and Exchange Commission has denied their request.

The SEC warns that Bitcoin is used in unregulated markets, citing this as a major factor in their decision not to list the digital currency. Advocates of Bitcoin were left floundering, feeling that the decision was a Catch 22: Without bringing Bitcoin to the market, it is much more difficult to develop regulated markets.

If Bitcoin was listed, a stock fund would be set up which would allow investors to purchases shares of bitcoin rather than go through the lengthy process of establishing a personal wallet. This would allow investors to bet on the digital currency but not to actually use the currency to purchase goods and services. One criticism of listing the currency is that it would compound issues and criticisms that the bulk of Bitcoin users are viewing the currency not as an actual currency to buy and sell goods with but as an investment vehicle. Listing Bitcoin could have added more volatility to the currency.

While this certification proposal failed, there are currently two more in the works for the SEC to rule on.

Would listing be good for Bitcoin? For those who have Bitcoin balances, listing would likely cause a dramatic increase in price. However, this could lead to more speculation and exposure for Bitcoin prices to rise and fall at the whims of investors.

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