Why has CBOE withdrawn an application for ETF?

The Chicago Board Options Exchange, which in December 2017 transformed the world’s first ever bituminous futures contract, has withdrawn its application for the approval of the first Exchange Exchange traded funds (ETFs).

The aforementioned proposal was submitted in cooperation with VanEck and SolidX as early as June 2018. And also has been postponed several times since then by the US Securities and Exchange Commission (SEC).

The final deadline for announcing a decision on this proposal was set for February 27, 2019. However, this deadline is not expected to be met due to the withdrawal of the application.

CBOE, VanEck, and SolidX, …

Of all ETF applications submitted, CBOE, VanEck, and SolidX have had the best success attributed to them. It is caused mainly due to the fact that Bitcoin would physically purchase – and not only futures contracts, as opposed to other designs.

Another factor behind this proposal was the high price of one security that was set at $ 200,000. It is indicating that this product was being shuffled toward big investors rather than a retail group that the regulators are trying to best protect from risky investments.

CBOE allegedly withdrew its proposal due to a US shutdown in which the funding of public institutions stopped with many civil servants having to take time out for paid leave. It resulted in a reduction in the operation of state institutions including SEC.

Against such a backdrop. It would be obvious that the proposal would not have passed. The Stock Exchange announced that it plans to re-submit to the US Commission after clarifying the situation. The date is not yet confirmed.

Complications associated with the current political situation

The complications associated with the current political situation in the US have not affected the approval of the ETF in the cryptographic sector. The long-awaited BAKKT cryptographic stock market is also awaiting approval from the regulator (CFTC). It is therefore very likely that the whole approval process will take much longer as a result of the aforementioned events.

How did the market react to these events? In practical terms, not at all. Many certainly expected a dramatic fall and sales similar to those we have seen in the past. But this did not transpire. Although the Bitcoin price dropped by about 1% immediately after reporting. It quickly recovered and returned to its original value.

What does that show? In connection with low volumes on the market, clearly illustrates that there is a minimum of speculators in the market and that the market is dominated by long-term and large investors. It may indicate positive future prospects. In these situations Bitcoin has experienced in past low points of its correction.