Thank you @sandwichbill for an actual easy-to-read recap of the chances of success for various players in the Bitcoin ETF situation, and also your earlier post “Why the SEC WILL Approve a Bitcoin ETF in 2018.”

On the topic of predictions, @jrcornel's “What might a Bitcoin ETF mean for the price?” has an interesting comparison using the post-ETF gold price as a way to think about how an ETF might affect the price of Bitcoin. (Hint: it's good news.)

Back in 2003 gold ETFs were introduced for the first time. Many of which were physically backed by the precious metal. At the time gold was trading for roughly $300 an ounce... Prices more than doubled to about $700 from 2003 to 2007, and reached $1000 an ounce just before the Recession and [Quantitative Easing] QE really sent prices of commodities skyward post 2009.

Also wanted to take a second to elaborate on the dissent from Commissioner Peirce, as she noted three reasons that she disagreed with the Commission's order disapproving the rule change that would've favored the Twins:

1. The proposed rule change DOES satisfy the requirements of Exchange Act section 6(b)(5)
2. The disapproval order inhibits institutionalization
3. The disapproval order stifles innovation

Here's a quick look at her dissenting comments on each of these three reasons, repurposed from, “SEC Commissioner Hester Peirce dissents from SEC decision against Winklevoss Bitcoin ETF,” an article we put together...

Contrary to the Commission’s determination, I believe that the proposed rule change satisfies the statutory standard and that we should permit BZX to list and trade this bitcoin-based exchange-traded product (“ETP”)

This is in reference to the Securities Exchange Act of 1934, section 6(b)(5), which states that the rules of a national securities exchange be “designed to prevent fraudulent and manipulative acts and practices [and] to protect investors and the public interest.”

Peirce argues that the commision is focusing on the underlying Bitcoin spot market (which seemingly doesn’t meet the criteria) but should instead be focusing on BZX specifically, and their ability “to surveil trading of and to deter manipulation in the ETP shares listed and traded on BZX.”

I am concerned that the Commission’s approach undermines investor protection by precluding greater institutionalization of the bitcoin market. More institutional participation would ameliorate many of the Commission’s concerns with the bitcoin market that underlie its disapproval order.

This is an interesting cart/horse type argument, basically saying that by not promoting the institutionalization of the bitcoin market, the SEC is preventing it from solving the very concerns they point to in their disapproval order.

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

And here’s a “chilling effect” type argument, that narrowly interpreting the statutory standard to preclude this proposed rule change would negatively impact innovators from participating in the markets.

In conclusion, Commissioner Peirce argues:

Many investors have expressed an interest in gaining exposure to bitcoin, and a subset of these investors would prefer to gain exposure without owning bitcoin directly. An ETP based on bitcoin would offer investors indirect exposure to bitcoin through a product that trades on a regulated securities market and in a manner that eliminates some of the frictions and worries of buying and holding bitcoin directly.

You can read Commissioner Peirce’s complete dissent at SEC.gov.

Excited to see where this goes.