The U.S. Securities and Exchange Commission (SEC) has delayed handing out a verdict on the application for a bitcoin Exchange Traded Fund (ETF) filed by the Chicago Board Options Exchange (CBOE).
The price of bitcoin plunged by more than $500 on the morning of Wednesday, August 8 as the crypto market responded to the announcement by the SEC a day before that it would delay its long-awaited verdict on the CBOE’s bitcoin ETF by another 45 days.
Speaking on the delay, Eduardo A. Aleman, an Assistant Secretary at the SEC, said the commission needed “sufficient time to consider the proposed rule change.” He said further that the CBOE had “received more than 1,300 comments on the proposed rule change.”
The announcement appears to have finally halted the crypto market’s recovery over the last couple of weeks that saw the price of bitcoin shoot past the $8,000 mark.
Prices monitored on CoinMarketCap on Wednesday morning showed Bitcoin had fallen by over 7% in the past 24 hours, to below its critical support level of $6,800. The altcoins also followed in tow with several of them posting losses of up to 10% of their value.
Many analysts expect the crypto market to reach new heights if and when the SEC approves a cryptocurrency ETF. A bitcoin ETF such as the one the CBOE applied for, is expected to herald the much anticipated entry of institutional investors into the crypto space.
The news of the delay provoked bitcoin’s single biggest plunge in weeks, continuing the run of bearish sentiments that was sparked when the SEC announced earlier on July 27 that it had denied a bitcoin ETF filed by the Winklevoss twins’ Gemini exchange.
And while the Commission did not reject the CBOE’s bitcoin ETF proposal, many investors fear that the postponement does not exactly bode well for the CBOE’s chances when the SEC finally delivers its verdict later in September.