SEC Delays Bitcoin Exchange Fund Approval; Gas prices continue to rise

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Crypto Coin

The United States Securities and Exchange Commission (SEC) has delayed completing its review of SkyBridge Capital’s application for a Bitcoin exchange-traded fund until the end of August.

SkyBridge Capital, a $ 7 billion alternative investment fund led by Anthony Scaramucci, filed an application on May 6 to launch and trade shares of the First Trust Bitcoin ETF Trust and hoped to gain approval within the 45-day time frame. .

“The Commission considers it appropriate to designate a longer period of time to take action on the proposed rule change so that it has sufficient time to consider… the comments received,” said J. Matthew DeLesDernier, Assistant Secretary from the SEC, in a letter posted on the federal agency’s website. “Accordingly… the Commission designates August 25, 2021 as the date on which the Commission must either approve or disapprove or initiate proceedings to determine whether to disapprove the proposed rule change. “

The proposed ETF would allow retail investors to invest in Bitcoin without direct ownership of the asset. So far, the SEC has been reluctant to approve a Bitcoin ETF and some speculate that this will not be the case because the crypto is too volatile.

But that didn’t kill interest in Bitcoin.

“I am not a Bitcoin evangelist, but I am a Bitcoin investor,” said Anthony Scaramucci. Pictured, he attends The Hollywood Reporter’s Most Powerful People In Media 2018 at The Pool on April 12, 2018 in New York City. Ben Gabbe / Getty Images

The Federal Reserve, the country’s central bank, has kept interest rates low to support the recovery as the economy emerges from the COVID-19 shutdown. Low interest rates have crushed small savers. In most cases, a savings account in a commercial bank does not keep pace with inflation.

Bonds are safe, but yields are low.

The Fed printed huge clouds of money and increased government spending raised fears of inflation. Some investors have therefore turned to Bitcoin in search of returns despite its volatility.

Bitcoin was up around 90% for the year when Scaramucci announced plans for EFT in March. The crypto then hit an all-time high, but recently lost about half of its peak value before rallying.

Others have sought to launch a Bitcoin ETF, including WisdomTree Investments, NYDIG, VanEck, and Valkyrie Digital Assets.

But so far the SEC has been reluctant to approve Bitcoin ETFs due to wild swings in cryptocurrency prices, lack of oversight, and the possibility of market manipulation.

However, two Bitcoin ETFs trade on the Toronto Stock Exchange. Bloomberg reported that ETFs plotting the crypto market have been launched in Europe and their market value topped € 1 billion in 2020.

The minimum investment proposed by Skybridge in its proposed EFT is $ 50,000. The minimum additional investment is $ 25,000, but the requirement may be waived in some cases. The proposed management fee is 0.75% per annum.

“The partnership’s investment strategy is designed to provide exposure to Bitcoin, the largest and most liquid digital asset through an institutional grade fund,” SkyBridge Capital said in its offer note. “The partnership’s investment program is speculative and involves substantial risk.”

SkyBridge Capital has announced its intention to list ETF shares on Arca of the New York Stock Exchange, a fully electronic trading that specializes in stock quotes and dominates the market.

An ETF tracks an index, commodity, sector, or other asset such as cryptocurrency. The fund can be bought or sold on the stock exchange like the shares of any publicly traded company. The strategy can include buying a range of stocks in a sector to spread the risk, but ETFs can also be tailored to commodities using a variety of investment strategies.

ETFs are often used to build a retirement portfolio. In what is considered a first, Guinness Atkinson recently completed the conversion of two mutual funds to ETFs.

SkyBridge also operates a Bitcoin fund that invests exclusively in crypto. The fund warns that investors could lose “all or a substantial part of their investment”.

In February, Scaramucci told Yahoo Finance that Bitcoin would hit $ 100,000 within 12 months. He sticks to his estimate.

“I am not a Bitcoin evangelist, but I am a Bitcoin investor,” he said.

Scaramucci is perhaps best known outside Wall Street for his 10-day tenure as former President Donald Trump’s communications director. He has since become a harsh critic of the former president.

Bitcoin and the stock markets were hit Thursday as investors sought safety amid fears of a COVID variant and a possible global slowdown in the recovery from the pandemic.

The Dow Jones Industrial Average, S&P 500, Nasdaq and Russell 2000 were down by midday.

Japan declared a state of emergency in Tokyo, the site of the Summer Olympics, citing a possible rebound in coronavirus infections, and banned spectators from the events. The move appeared to give the markets yet another case of nervousness and put an end to Bitcoin’s modest rally. Ethereum and other cryptos also fell.

At midday on Thursday, Bitcoin changed hands to $ 32,831.64, down 4.94% in the past 24 hours but up 12.62% for the year. The 24 hour range is $ 32,114.78 to $ 34,779.41. The all-time high is $ 64,829.14. The current market capitalization is $ 615.60 billion, CoinDesk reported.

Market momentum

Gasoline prices have jumped about 40% year-to-date and are expected to rise.

The average price of a gallon of regular gasoline is $ 3.13, down from $ 2.25 on Jan. 1, according to the American Automobile Association. Mario Anzuoni / Reuters

The average price of a gallon of regular gasoline is $ 3.13, down from $ 2.25 on Jan. 1, according to the American Automobile Association.

Prices could rise an additional 10 to 20 cents per gallon through the end of August.

The nation’s highest average price was $ 4.11 per gallon on July 17, 2008, AAA said.

West Texas Intermediate crude, the benchmark for U.S. oil prices, recently topped $ 75 a barrel – the highest since November 2014.

Demand increased as the economy reopened, pushing up prices.

Higher fuel costs trickle down to the economy, pushing up producer and consumer prices for anything delivered by truck or train and fueling inflation.

Between May 2020 and May 2021, the personal consumption expenditure index (PCE) increased by 3.9% and the consumer price index (CPI) increased by 5%.

Gasoline reserves are in good condition and one-off shortages seem unlikely.

The US Energy Information Administration (EIA) said demand was 9.1 million barrels per day. Gasoline inventories rose 1.5 million barrels to 241 million barrels last week.

Crude oil represents 52% of the cost of a gallon of gasoline; refining, 19%; taxes 16%; distribution and marketing 14%, the federal agency said.

Tropical Storm Elsa made landfall on the Florida Gulf Coast north of Tampa. It missed the Texas Gulf Coast refineries, so it won’t disrupt production.

The storm is expected to move up the east coast and bring heavy rain to New York City by Friday.

The Organization of the Petroleum Exporting Countries (OPEC) has not reached a deal that could increase production by 500,000 barrels per day in August.

Earlier this week, White House press secretary Jen Psaki said the United States had spoken to OPEC members and urged them to strike a deal.

An increase in production would increase the supply and slow down the rise in prices.

“Over the next few months, we expect global oil production to catch up with the increases in demand we saw in 2021,” Stephen Nalley, EIA Acting Administrator, said in a press release. .

“US and global oil producers are increasing production, which should help moderate oil prices which have risen significantly as global economic concerns over the COVID-19 pandemic have started to ease.”

AAA said the 10 states reporting the biggest increase in pump prices this week are: Idaho (+10 cents), Alaska (+9 cents), Washington (+7 cents), Oregon ( +7 cents), Colorado (+7 cents), Ohio (+6 cents), Utah (+6 cents), Wyoming (+6 cents), Nevada (+5 cents) and Montana (+5 cents).

The ten states with the lowest average prices are: Mississippi ($ 2.75), Louisiana ($ 2.76), Texas ($ 2.80), Missouri ($ 2.80), South Carolina (2, $ 81), Alabama ($ 2.81), Arkansas ($ 2.82), Oklahoma ($ 2.83), Kansas ($ 2.87), and Tennessee ($ 2.88).

Prices in California averaged $ 4.30 a gallon on Wednesday.

Lundberg’s investigation called California “the flagship of rising retail prices that is ravaging demand.”

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