Bitcoin’s Very Important Day Has Turned Into a Shitshow
An investment fund was denied, and price is plummeting.
In February, bitcoin reached its highest value ever in the history of the currency, and earlier this month was priced higher than gold. Investors and enthusiasts were elated, but cautious. The steep rise in value was largely attributed to an anticipated ruling by the Securities and Exchange Commission on a proposed bitcoin investment fund, headed up by the Winklevoss twins.
On Friday, the SEC denied the fund. Now, bitcoin's future seems less certain than it did just days ago, and its massive price gains hang in the balance.
The Winklevoss Bitcoin Trust, if approved, would have held bitcoins and issued shares to investors, who would have gotten a return only if the price of bitcoin rose. According to an SEC filing explaining the department's decision on Friday, the trust was denied because the vast majority of the bitcoin ecosystem is currently unregulated.
Simply put, the SEC's decision largely hinged on the principle that the assets underlying a fund should be resistant to price manipulation. And, the SEC filing claims, since a large number of bitcoin exchanges—where coins are traded—are unregulated and outside the US, the Winklevoss Trust can't meet this requirement.
Bitcoin is already seeing the disastrous effects of a misfired round of speculation. While the price of a single bitcoin was trending above $1300 just hours before the SEC's decision, the price immediately plummeted to just above $1000 in the minutes after.
All this is to say: Pray for the bitcoiners.
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