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Cryptocurrencies Drop as Government Shutdown Hits Bitcoin ETF

Published 2019-01-24, 10:12 a/m
© Reuters.
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Investing.com - Cryptocurrencies moved mostly lower on Thursday, amid a lack of major news.

Sentiment suffered marginally as CBOE Global Markets pulled plans to list a Bitcoin exchange-traded fund (ETF), blaming the impact of the U.S. government shutdown on request-processing at the U.S. Securities and Exchange Commission.

Bitcoin dropped 0.37% to $3,562.8 on the Investing.com Index as of 10:09 AM ET (15:09 GMT).

XRP traded down 0.35% to $0.31598, Ethereum, or Ether, fell 1.20% to $116.42, while Litecoin broke the general trend, gaining 0.45% to 31.994.

The CBOE’s BZX Equity Exchange pulled a request to list the Bitcoin ETF that was supported by investment firm VanEck and financial services company SolidX.

“We were engaged in discussions with the SEC about the Bitcoin-related issues, custody, market manipulation, prices, and that had to stop,” Jan van Eck, chief executive officer of VanEck, explained to CNBC.

“Instead of trying to slip through or something, we just had the application pulled and we will re-file and re-engage in the discussions when the SEC gets going again,” he added.

The project had stoked hopes that regulatory approval of the Bitcoin ETF would attract more investors to digital assets.

The withdrawal is another setback on the rocky road to broad public acceptance for digital currencies. Regulatory bodies around the world are hesitant to put stamps of approval on investment vehicles as they struggle to form frameworks that can control the highly volatile industry and curb illegal activity.

The VanEck/SolidX project is, however, more collateral damage from a broader and essentially unrelated issue.

Charles Li Xiaojia, head of the Hong Kong Stock Exchange, commented on Thursday at the World Economic Forum that companies applying for initial public offerings needed to show “sustainability” in their business models.

According to South China Morning Post, while his comments were meant to encompass all applications for listings, they were a response to direct questions of the ongoing process with the cryptocurrency miners Bitmain Technology, Canaan Creative, and Ebang International Holdings, which all solicited listings last year.

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