With forks and fraud and FUD, bitcoin is down roughly 55% from its all-time highs of last fall.

So is that a good thing for the cyptocurrency? Will it allow bitcoin to have staying power for the long haul?

At $7,952 as I write this bitcoin is well off its 60-day lows as well. So I have to believe the paper futures trading has had a some impact on pricing, despite the paltry amount of contracts traded among the many exchanges.

No, the real culprit behind the halving of bitcoin’s price over the last five months is the incredibly nefarious initial coin offering market. This black hole of scammers and schemers have given a unknowing public far more reason to walk away from bitcoin than an impetus to jump in.

To be clear, not all ICOs are dubious, but all you need is 20% of them to fail either through fraud or stupidity by the launchers to spoil the whole crypto stew.

Most regulators would have a hard time discerning middle tier ICOs from a pump and dump scheme, which many seem to be more aligned to. So forget about unsophisticated investors.

Well the exchanges who brought you bitcoin futures are now pushing the regulators for approval on the bitcoin ETF. This is not you Spider Fund, tracking the S&P 500 and that’s what has regulators concerned.

In January 18 letter, SEC director Dalia Blass told the exchanges that the regulator has issues with a product that lacks transparency, has the potential for manipulation and creates an uneven playing field.

“Until the questions identified above can be addressed satisfactorily, we do not believe that it is appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products,” the SEC release said.

In a response in last week CBOE President Chris Concannon said the exchange believes “that the vast majority of these concerns can be addressed within the existing framework for commodity-related funds related to valuation, liquidity, custody, arbitrage, and manipulation. As the volumes continue to grow, especially on regulated U.S. markets, the overall spot bitcoin market looks more and more like a traditional commodity market and CBOE continues to believe that the spot market is sufficiently liquid to support a bitcoin ETP.”

Would another product lift bitcoin out of its “pink sheet” image and above some of the more questionable ICOs, which are linked to porn or paying for dental work?

Not exactly sure, but if regulators deny the creation, then bitcoin will languish at this price for a longer period of time.