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The digital currency has moved a long way towards legitimacy since its launch, but it will not become a mainstream investment without the Securities and Exchange Commission's membership.
The SEC has not yet given the go-ahead to any bitcoin projects. The agency has already rejected the bitcoin ETF plans of Direxion, ProShares and Tyler and Cameron Winklevoss, the twins who became famous for their legal battle with Mark Zuckerberg on the origins of the idea for Facebook.
Bitwise Asset Management filed last week with the SEC for an exchange-traded fund that would replicate the bitcoin's performance. Another company, Wilshire Phoenix Funds, filed a request to sell shares in a fund that would have owned a mix of bitcoins, short-term Treasury bills and US dollars.
A decision on another bitcoin ETF proposed by the VanEck mutual fund company has been postponed. Since the arrest is forcing the SEC to work with limited staff, it is unlikely that the problem will be resolved until the government reopens.
The SEC has not responded to a request for comment.
Matt Hougan, head of global research for Bitwise Asset Management, said he thinks the SEC is only prudent and does not rush to give the maximum to ETFs for an asset class that is still evolving.
Cryptocurrencies like bitcoin have many reasons for caution.
"Bitcoin is a speculative asset that's still in its infancy," said John Ryding, Moeda economist and consultant, who uses blockchain technology to help small businesses get loans. "It may take some time before the market shakes part of the excess, the good news is that the bitcoin has been beaten but is still at stake."
Bitcoin optimists like Hougan think the worst is over. And there is evidence of traditional acceptance.
In 2017, bitcoin futures launched on both the Chicago Board Options Exchange and the Chicago Mercantile Exchange and the mutual fund giant Fidelity also established a trading platform for bitcoins and other cryptocurrencies at the end of last year.
Even Jeff Gundlach of DoubleLine Capital, known as bitcoin, looks positive. He recently told investors that he believes bitcoin prices could come together later this year and get around $ 5,000. It is not even remotely at the height of the currency, but it is still a gain of 35% compared to current levels. Stable trading could help convince the SEC that it's the right time to change tone.
Others are not so sure that the bitcoin is recovering.
"We have not seen the bitcoin fund," wrote Marin Katusa, head of Katusa Research in a recent report. "The dot-com bubble of the last years & # 90; was held exactly the same way: hundreds of companies have ridden the growing wave of investor sentiment to cash in on hysteria. hysteria can only support valuations for so long, and eventually the fundamentals take over. "
Hysteria often gives way to fear. The dramatic collapse may have scared some investors forever.
Hougan has admitted that there must be a big jolt in the cryptocurrency market for bitcoins to rebound. There are simply too many digital coins out there, and bitcoin still has the dominant market share.
"Most cryptocurrencies are trash and will be thrown into the trash of history," Hougan said. "First, it's better."
