The agency must decide if the BATS stock exchange can change its rules to offer a bitcoin ETF (exchange traded fund), which would let people buy bitcoin like a common stock. The ETF—called the Winklevoss Bitcoin Trust ETF—is the creation of the Winklevoss brothers, who once fought Mark Zuckerberg for control of Facebook, and now own a large stock of bitcoins.

WHY IS THIS ETF SUCH A BIG DEAL?
It's all about liquidity. While there are plenty of places to buy bitcoin, many investment funds can only hold assets that meet certain regulatory standards—such as approval from the SEC. If the agency approves the ETF application, money managers who want to include bitcoin in their portfolio are likely to jump in. Meanwhile, millions of ordinary people will have an easy new way to buy the digital currency. I can't really phrase it any better than this quote from BitMex, a bitcoin analysis site:

If the SEC approves the Bats rule change, all manner of American muppet retail investors can yolo into Bitcoin via a regulated ETF. The pool of eligible money that can easily obtain exposure to Bitcoin will dramatically rise. There are various predictions about the amount of money that could flow into Bitcoin. In short, it will be Yuge.

Eoin Treacy's view

Bitcoin is a speculative vehicle with unique characteristics that make it especially attractive for people looking to skirt capital controls and other forms of official surveillance. To date Chinese traders have dominated volume but if the SEC allows ETFs to track the price then it will potentially open up additional sources of demand from investors seeking an alternative asset class. 

Bitcoin has surged since the Chinese investigation of local exchanges in January and posted a new high last week near $1300. It steadied today in anticipation of the SEC decision but with such a wide overextension relative to the trend mean it is reasonable to conclude that many traders have already initiated long positions. The risk of another abrupt bout of volatility cannot be ruled out.