The Chicago Board Options Exchange (CBOE) and VanEck refiled their Bitcoin exchange-traded fund (ETF) application. But, there likely won’t be a Bitcoin ETF by the end of the year and possibly by the year’s end.

On January 31, as CCN.com reported, VanEck announced that it submitted its newly drafted Bitcoin ETF application to the U.S. Securities and Exchange Commission (SEC).

The VanEck SolidX Bitcoin ETF proposed rule-change has been submitted by CBOE. Hard work by all teams involved. Public document: https://t.co/X25lOPjiFS pic.twitter.com/C9FP4adDE8 — Gabor Gurbacs (@gaborgurbacs) January 31, 2019

Why There Will be No Bitcoin ETF Until the Year’s End

In late January, due to the shutdown of the U.S. government and the lack of staff members at the SEC to continue discussions on the prospect of the approval of a Bitcoin ETF, VanEck officially withdrew its application.

At the time, a VanEck director Gabor Gurbacs said:

The Bitcoin ETF filing has been temporarily withdrawn. We are actively working with regulators and major market participants to build appropriate market structure frameworks for a Bitcoin ETF and digital assets in general.

An issue that arises when an ETF filing is pulled is that the clock resets and the 240-day deadline is established once again when a new filing is submitted.

Given the tendency of the U.S. SEC to wait out the 240-day period before it gives out its final decision, there will not be a Bitcoin ETF in the U.S. market until the fourth quarter of this year.

The SEC does not have an incentive or a motive to go out of its way to approve an ETF before its final deadline.

As Spencer Bogart, a partner at a major crypto investment firm Blockchain Capital, said in February 2017, if the commission approves an ETF prematurely and the ETF runs into major problems, the SEC has to take responsibility for it.

Meanwhile, if the ETF performs well and does not pose any threat in regards to investor protection, manipulation, and money laundering, the SEC does not necessarily benefit from it.

Bogart said previously:

When you think about the game theory aspect of this, if I work at the SEC and I approve this ETF and it goes well, nobody is probably going to come around and pat me on the back and give me a promotion. But if I approve it and a lot of money flows into it, and something goes wrong, I am likely to lose my job.

Similarly, when VanEck first pulled its ETF application last month, Jake Chervinsky, a government enforcement defense and securities litigation attorney at Kobre & Kim, said that there would not be a Bitcoin ETF in the first quarter of 2019.

CBOE has withdrawn the VanEck/SolidX bitcoin ETF proposal (https://t.co/812Ym7U7Hh). They haven't given a reason yet, but withdrawal implies that they expected denial & didn't want another SEC order setting bad precedent for the future. There will be no bitcoin ETF in Q1 2019. — Jake Chervinsky (@jchervinsky) January 23, 2019

Why VanEck Had to Pull its Filing

Due to decades of track record in operating ETFs in the U.S. market, the community expects the first Bitcoin ETF in the U.S. to come from VanEck and CBOE.

As such, updates on the ETF filings of the two institutions are often highly anticipated and actively observed by both investors and companies in the cryptocurrency sector.

Based on its experience dealing with hundreds of ETF filings in the past, VanEck likely believed that it did not have sufficient time to conclude the discussions it had with the SEC prior to the government shutdown.

From previous ETF rejections, the SEC’s concerns regarding the approval of a Bitcoin ETF are well documented and they come down to three major factors:

Preventing manipulation in crypto markets Lack of regulation in overseas markets Surveillance and investor protection

If VanEck had aggressively pushed its ETF toward its initial February deadline, the month-long shutdown of the U.S. government during which the institution could not engage discussions with the SEC would most likely have prevented the institution from properly addressing the concerns of the SEC.

Now that the ETF is refiled and the deadline reset, and the only other high-profile Bitcoin ETF filing was submitted by Bitwise in January, no Bitcoin ETFs will reasonably be approved before the fourth quarter of this year.

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