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Fred Dunkley

Fred Dunkley

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Fred Dunkley is a tech analyst, writer, and seasoned investor. Fred has years of experience covering global markets and geopolitics. 

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Cryptos Pummeled Again On New SEC Attack

BTC

Crypto is getting crushed a day after the Securities and Exchange Commission (SEC) moved to suspend trading in bitcoin and ethereum-related products over their ETF characteristics.

On Sunday, September 9, the SEC suspended two securities listed on the Stockholm stock exchange in Nasdaq’s Nordic markets--Bitcoin Tracker One and Ether Tracker One—citing “lack of current, consistent and accurate information concerning Bitcoin Tracker One (Ticker Symbol: CXBTF) and Ether Tracker One (Ticker Symbol: CETHF), issued by XBT Provider AB (publ), a Swedish company headquartered in Stockholm, resulting in confusion amongst market participants regarding these financial instruments”.

Suspending two Stockholm securities may sound innocuous; however, it’s anything but. The ripple effect has been disastrous.

By Monday morning EST, the crypto market had hit a new 10-month low, according to Bloomberg.

The sharpest decline has been with ether, which lost 10 percent since Friday’s market close, while bitcoin has lost 2.6 percent.

(Click to enlarge) 

Source: Bloomberg

The crypto market has lost a total of $640 billion since the beginning of this year, and the SEC’s latest move looks set to extend the stunning meltdown that’s been playing out for some five out of the past six weeks already.

Just about anything can rattle the crypto market, and the SEC has been the biggest antagonist. Related: Trump Administration Escalates War On Social Media

This time, it’s concerned about ETFs, specifically: “…The broker-dealer application materials submitted to enable the offer and sale of these financial products in the United States, as well as certain trading websites, characterize them as ‘Exchange Traded Funds’. Other public sources characterize the instruments as ‘Exchange Traded Notes’. By contrast, the issuer characterizes them in its offering materials as ‘non-equity linked certificates’. CXBTF and CETHF are listed and trade on the NASDAQ/OMX in Stockholm and have recently been quoted on OTC Link (previously “Pink Sheets”) operated by OTC Markets Group, Inc.”

Amid this confusion as to what, exactly, is on offer here, the SEC said that for the sake of public interest and the protection of investors, a suspension in trading was necessary.

There other issues weighing on crypto, too, with ether being the biggest concern lately.

According to Bloomberg, ether’s broader fall is partly based on fears that blockchain-related firms are cashing out because startups will need to start selling post-ICO holdings to cover expenses.

“The rhetoric around ICOs continuing to unload their raise proceeds on the market remains valid,” Rabaglia told Bloomberg. “It’s hard to see how that story line will go away any time soon.”

Related: S&P's New "Custom Credit Ratings" For Chinese Debt

Up next on the crypto radar will be the SEC’s decision on whether to allow the VanEck and SolidX Bitcoin Trust ETF to go forward. That decision is set for September 30, Sunday’s trading suspension couple with the rejection of the Winkelvoss twins’ fund earlier this year have everyone nervous.

Institutional investors have been increasingly dipping their toes in the crypto world, but confidence isn’t high enough and the whales may still have too much influence over the market.

As of 10:10 EST Monday, crypto prices were looking grim:

(Click to enlarge)

Source: Prices.org

By Fred Dunkley for Safehaven.com 

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