CNBC’s Analyst Brian Kelly Says Bitcoin ETF Approval Likely by February 2019

Crypto analyst Brian Kelly has predicted that approval of a Bitcoin (BTC) exchange-traded fund (ETF) will “likeliest” and “earliest” come in February 2019, in an interview on CNBC’s Fast Money August 23.

Kelly’s forecast comes hot upon the heels of the U.S. Securities and Exchange Commission’s (SEC) rejection of nine BTC derivatives-based ETF proposals from three applicants August 22.

An ETF is a type of mutual investment fund that divides ownership of a commodity, derivative,  index, or basket of assets, into shares. The fund tracks the value of the underlying asset(s) and is traded on exchanges, with shareholders entitled to any positive returns.

ETFs are marketable securities that require oversight by government authorities, and the current and prospective regulatory status of crypto-related ETFs remains unresolved and avidly discussed.

Kelly pointed out that while the SEC has recently chosen to delay its decision on a separate and high-profile BTC ETF application from investment firm VanEck and financial services co. SolidX until this September, the regulator in fact has the option to again defer its final decision on the proposal until February at the latest. Kelly suggested the agency would be likely to choose to do so, citing four further grounds.

First, Kelly responded to the concerns voiced by the SEC in all of its BTC-related ETF rejections to date, these being the agency’s qualms over inadequate resistance to “fraudulent and manipulative acts and practices” in an insufficiently sized BTC derivatives market and the largely unregulated underlying spot market. Kelly argued that:

“[When] the SEC talked about fraud and manipulation, it wasn’t so much about preventing it, but how do they surveil it? Do they have an arrangement with other [globally or nationally regulated] exchanges [that would enable them to] surveil what’s going on?”

He then affirmed the SEC’s argument that the existing BTC futures market is “not mature enough” — remembering that BTC futures were only launched on major U.S. exchanges CBOE and CME last December. But Kelly then argued that according to statistics from CME, the futures market is fast evolving and we will likely “have a much better shot” at ETF approval by 2019:

“Here’s CME Futures open interest of large holders. [As of] April, you’re starting to see a big increase… about an 85 percent growth rate. If you extrapolate that out, by February 2019, you’re going to have a very robust market here.”

Kelly added that the Intercontinental Exchange (ICE)’s recently unveiled initiative to launch a global, regulated digital assets ecosystem would further bolster the crypto spot and derivatives markets, and likely become part of the SEC’s equation.

He concluded by taking stock of breaking news that the SEC plans to review its fresh spate of ETF rejections, as well as voices within the agency — notably SEC Commissioner Hester M. Peirce — who have officially dissented from the regulator’s prior BTC-related ETF rejections.

As Kelly noted, a bullish sign of “sentiment change” that suggests we are coming “incrementally closer” to ETF approval is that the “market didn’t sell off” on news of the most recent disapproval orders. While Bitcoin took a temporary price hit on news of the rejections August 22, the coin quickly recovered back to its week-long trading levels.

As of press time, Bitcoin is trading around $6,528, up around 1.5 percent on the day and 1 percent on the week.

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Bitcoin’s Price Hit Its Lowest Point Since Early February

The price of bitcoin on Friday fell to a level last seen in early February when it registered its lowest price in 2018.

Prices went as low as $6,081.09, according to CoinDesk’s Bitcoin Price Index (BPI), a significant drop considering the day’s opening price of $6,717.20.

At press time, bitcoin’s price – currently hovering at around $6,209 – is down about 68% from the 2018 high of $19,783 set in January.

Other cryptocurrencies are following suit as bitcoin continues to flirt with support levels, as shown in data published by sources like OnChainFX.

Litecoin, for example – the world’s sixth largest cryptocurrency by market cap – hit its lowest level in 7 months. The price of ether currently at about $479, roughly 60 percent from its all-time high in December 2017.

As it stands, the overall cryptocurrency market cap is $259,608,722,201 down 68 percent from its high of $813,871,000,000, according to CoinMarketCap.

Other indicators similarly depict the state of the market as it stands today.

The Relative Strength Index (RSI), a popular momentum indicator, demonstrates a weekly value of 41 according to Bitfinex exchange data, a level that was last seen in September of 2015.

Compared to bitcoin’s lowest weekly RSI level (27) for the prolonged bear market in 2014, current levels show scope for significant additional depreciation.


Image via Shutterstock

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Week in Review for February 23, 2018: Sidechains, Stings and Venezuela

In the past week, news from Venezuela was at the forefront, where crypto mining is way up due to cheap electricity. But their stab at launching their own crypto, the Petro, is not looking like a great plan so far.

Good news in regulation, however, is coming from the state of Wyoming as the House unanimously passed two pro-blockchain bills, with five more in the pipe.

On the technological front, researches think they have solved a big part of the “sidechain” puzzle and have published a detailed paper called “Non-Interactive Proofs of Proof-of-Work.” 

Here are some of the headlines from this past week in the Bitcoin and blockchain space.

Featured stories by Amy Castor, David Hollerith and Erik Kuebler.

Sidechains: Why These Researchers Think They Solved a Key Piece of the Puzzle

Bitcoin was the original blockchain that everyone knew about, but new ones are being created all the time, with hundreds currently available. At issue is if you want to use the features offered on another blockchain, you have to buy the tokens to use it. A technology looking to change all that is called “sidechains.”

Blockchain researcher Aggelos Kiayias and researcher Dionysis Zindros released a paper in October 2017 called “Non-Interactive Proofs of Proof-of-Work” (NiPoPoW), introducing a critical piece to the sidechains puzzle that had been missing for three years. A sidechain is a technology that allows you to move your tokens from one blockchain to another, use them on that other blockchain and then move them back at a later point in time, without the need for a third party.

IOHK CEO Charles Hoskinson is confident it can be done. “We can definitely do that,” he said. “We can definitely have a NiPoPoS [non-interactive proof of proof-of-stake]. The question is how many megabytes or kilobytes is it going to be? Can we bring it down to 100 KB? That is really the question.”

Bitcoiner Faces Charges After Selling BTC to an Undercover Cop

On February 9, 2018, officials from U.S. Immigration and Customs Enforcement (ICE) arrested Morgan Rockcoons (aka “Morgan Rockwell” or “Metaballo”), CEO of Bitcoin, Inc., and an entrepreneur behind several other Bitcoin startups, at his home in Las Vegas, Nevada. Rockcoons was charged with money laundering and operating an unlicensed money transmitting business, according to court records.

According to those records, Rockcoons allegedly exchanged 10 bitcoin (worth about $9,200 at the time) for $14,500 in cash from an undercover law enforcement officer at the beginning of 2017. It is alleged that Rockcoons was told in advance that the cash came from the manufacture and distribution of “hash oil,” which contains a federally controlled substance. This is what led to the charges of money laundering.

Since his arrest, Rockcoons has been tweeting and emailing his innocence and asserting that he was entrapped, in addition to refuting many aspects of the court records. He is actively seeking donations to pay for his legal fees, which he expects to be between $150,000 and $300,000

Wyoming House Unanimously Approves Two Pro-Blockchain Bills

The Wyoming House of Representatives voted unanimously to pass two blockchain-oriented bills — HB 70 the “utility token bill” and HB 19 the “bitcoin bill” — sending them to the State Senate for consideration. HB 70 defines utility tokens as neither traditional money nor securities; HB 19 exempts cryptocurrency from the 2003 Wyoming Money Transmitters Act (passed in the state before Bitcoin’s invention in 2008).

Wyoming Blockchain Coalition co-founder and 22-year Wall Street veteran Caitlin Long explained, “There are already bitcoin miners setting up shop because of [Wyoming’s] cheap electricity, no income tax and no franchise tax.” Wyoming aims to set the standard for blockchain-friendly regulation in the U.S. and to become a hub for blockchain-based innovation with these two bills. The Wyoming House of Representatives is also reviewing bills HB 101 and HB 126 in the House and SF 111 in the Senate.

Venezuela’s On-and-Off Love Affair With Cryptocurrency Mining: It’s Complicated

The economic recession has been active in Venezuela for more than a decade, with inflation of the Venezuelan bolivar (VEF) exceeding 650 percent, and gross domestic product (GDP) contracting 12 percent in 2017. Falling oil prices in 2014 have exacerbated the economic depression in the country; however, it is oil that has catalyzed Venezuela’s current cryptocurrency boom.

Because the government subsidizes electricity to the point where it costs almost nothing, people are able to run three Antminer S9s running at a cost of about 30 cents per month. These miners will generate about one bitcoin every 10 months, thus providing an alternate method of generating income in the impoverished nation.

“There must be tens of thousands of people mining in Venezuela,” said Randy Brito, founder of the nonprofit website Bitcoin is the most commonly mined cryptocurrency because it was the first, and LocalBitcoins also gives bitcoin an advantage because it does not trade other cryptocurrencies; it is able to operate more safely than other local exchanges because it’s not based within the country.

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Coinbase Product Update — February 5, 2018 – The Coinbase Blog

Our mission is to make Coinbase the most trusted, safe, and easy-to-use digital currency exchange. We believe actions speak louder than words, so going forward we will be publishing weekly product updates on our blog, explaining new features we’ve shipped, issues that have come up and been resolved, and product changes that impact your Coinbase experience.

Identity verification improvements

We saw record sign ups and activity in December. As a result of this growth, our identity verification systems were overwhelmed and many customers experienced significant delays in verifying their photo ID. This resulted in a poor experience for our customers. We’re sorry and determined to not have this happen again.

Over the last 8 weeks, our team has invested time upgrading our verification systems and integrating an additional ID verification vendor. We are now verifying nearly 90% of all customers who submit a photo ID. We are continuing to invest in improvements to our verification systems and later this week, we’ll be publishing a more detailed post specifically highlighting issues and improvements to identity verification.

Credit card purchases

Last week, some customers using credit cards started to see an additional “cash advance” charge on their card statement. This was the result of the MCC code for digital currency purchases being changed by a number of the major credit card networks. Banks and credit card issuers may now add cash advance fees to purchases of digital currency. Customers will notice this listed as a separate line item on their credit card statement.

These additional fees are not from Coinbase. Because these fees are charged directly by the bank or credit card issuer, unfortunately we don’t have a way of knowing when they might be charged or how much they might be. If you were charged additional fees, we recommend contacting your bank as you may be able to have these waived or receive information about switching to a card with lower fees.

For customers purchasing digital currency with a credit card, we added a warning about potential cash advance fees. However, we did a poor job messaging this to customers more broadly. We’ve since emailed customers with a linked credit card notifying them of this change. Going forward, we will notify customers of changes related to payment methods via our blog, email and Twitter.

Additionally, last week some US banks began blocking credit card purchases of digital currency, most notably Chase, Bank of America, Citi and Capital One. All debit card transactions remain unaffected.

If your credit card is blocked or to avoid cash advance fees, customers can switch their payment method to a debit card or bank account. It will save you money, get you higher purchase limits, and it takes just a couple of minutes. Visit our payment methods page to get started.


We understand that trust in Coinbase is earned by ensuring that customers can do exactly what they want with their money. Any time a customer is unable to take action — buying, selling, depositing, withdrawing, sending, or receiving — we are not meeting customer expectations. We do not take issues like this lightly. We sincerely apologize for any inconvenience as we scale. We’re working hard to consistently improve your Coinbase experience.

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