The Securities and Exchange Commission (SEC) must make a decision by Saturday about whether or not to allow Bitcoin to be publicly traded like common stocks. If they approve the rule change necessary to offer a Bitcoin exchange traded fund (ETF), the price of the cryptocurrency could skyrocket.
The rule change would allow investment funds to hold Bitcoins as assets and money managers are expected to swoop in.
However, if the SEC decides to rule against Bitcoin, the price could nose dive. The price has already been in flux as of late, due in part to China’s recent crackdown on Bitcoin trading. But despite the ups and downs, the price rose 25 percent in 2017 so far and 120 percent in 2016.
Experts say the outcome of the SEC ruling is practically a coin toss, although the chance of Bitcoins receiving an ETF in the foreseeable future is almost inevitable.
The push to get a Bitcoin led ETF is being run oddly enough by the Winklevoss twins, the pair who sued Mark Zuckerberg for allegedly stealing their idea to create Facebook. The proposal would use Winklevoss backed businesses to store the bitcoins that would back the shares. Some are concerned this would centralize control of a currency which was previously decentralized and freewheeling.
Marketwatch reported today that the biggest threat facing Bitcoin might not be a negative SEC ruling, but the way Bitcoins are transacted. Bitcoins transactions must be approved individually in the blockchain network, and buyers are already victims of long wait times to get transactions approved. If the SEC rules in favor of allowing Bitcoin to be publicly traded, this scaling problem could get even worse.
Bitcoin has always been a gamble — with a volatile price and uncertainties regarding regulation — and so would an investment in the cryptocurrency now. But investors have much to gain by buying now and reaping an enormous windfall following a favorable ruling by the FEC. Are you feeling lucky?
The SEC decision will be announced online here.
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