As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.

The Commission believes that, in order to meet this standard, an exchange that lists and trades shares of commodity-trust exchange-traded products (“ETPs”) must, in addition to other applicable requirements, satisfy two requirements that are dispositive in this matter. First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated

 

Eoin Treacy's view

Bitcoin was subject to quite acute volatility in the aftermath of the decision; falling from $1300 to below $1000 before recovering somewhat and rallying rather impressively today. 

Twice in this year, let’s not forget we are still only in March, bitcoin prices have experienced major downdrafts before subsequently rallying. The first was in response to Chinese monetary authorities raiding domestic bitcoin exchanges to clamp down on speculation. The second was in response to a denial of the effort by the Winklevoss twins to unload part of their bitcoin hoard on retail investors. 

Nevertheless, this is a week which is likely to be heavily influenced by what happens on the data front. Teresa May, Janet Yellen and the Dutch election are all likely to dominate headlines and that may be fuelling demand for an uncorrelated asset like Bitcoin. Whether it can hold the region of its highs after this week is very much open to question and increased volatility suggests that while the market was risky before it is now characterised by a casino mentality.