Chicago Board Options Exchange (CBOE) Withdraws Bitcoin ETF Proposal

Wilfred Michael 

Wilfred Michael

News reporter

24 January 2019,
Chicago Board Options Exchange (CBOE) Withdraws Bitcoin ETF Proposal

A withdrawal notice released by the U.S Securities and Exchanges Commission on Jan, 23 shows that the Chicago Board Options Exchange (CBOE) has withdrawn its request for a proposed rule change that would have lead to the first Bitcoin Exchange Traded Fund (ETF) on a major U.S exchange.

The CBOE filed for the rule change in June 2018 in partnership with an investment firm VanEck and SolidX but was made to wait for a long time before the SEC announced a final decision.

The regulatory body has not decided for or against the proposed rule change and only released a Feb 27, 2019 date as the deadline for concluding the matter.

Until now, the crypto industry holds the opinion that the existence of such an offering (Bitcoin ETF) on a public exchange would result in mass adoption of cryptocurrencies, especially by institutional investors.

However, any such hopes have been dashed, at least for the moment while the industry continues to grow outside the boundaries of a traditional stock exchange.

Why Did CBOE Withdraw Its Bitcoin ETF Application?

While we await an official announcement from the exchange on why it withdrew its application, here are two likely reasons :

  • The U.S government shutdown in recent weeks means that the SEC may not have enough time to properly review the form ahead of the set February 27 deadline. So, instead of waiting to receive an automatic rejection from the regulators, the CBOE may prefer to rescind the application by itself and apply at a later date.

  • The CBOE may have compiled a new application that it believes will gain more favor with the Securities Commission and would instead cancel its current application before sending in another

Whatever, the reason is, the crypto industry still have a shot at winning its first Bitcoin ETF in 2019. Crypto startup, Bitwise revealed earlier this month that it had submitted a proposal with the SEC for a rule change that will result in a Bitcoin ETF listing on the New York Stock Exchange (NYSE).

Meanwhile, the SEC has continued to face criticism for classifying cryptocurrencies as securities, a possible reason why the regulators failed to announce a decision on CBOE’s proposal.