Why the Winklevoss Bitcoin ETF May Not Be Dead Yet

The bitcoin ETF may still rise.

After a March 10 Securities and Exchange Commission ruling that nixed an official exchange-traded fund for bitcoin, many saw the issue as settled. But Bats BZX Exchange, which would have listed the ETF on its exchange, has revealed it will appeal the SEC’s decision.

The SEC turned down the ETF earlier this month because the online exchanges that bitcoin is traded on are not regulated, and therefore susceptible to fraud and other manipulation. (Read: Everything You Need to Know About the Bitcoin ETF.) Had the ETF been approved, it would have tracked the price of bitcoin and made buying and selling them as simple as a stock transaction.

The ETF, known as the Winklevoss Bitcoin Trust, was created by Cameron and Tyler Winklevoss, who were made famous (and quite rich) thanks to their lawsuit against Mark Zuckerberg over their involvement in Facebook’s creation. The two brothers have been trying for years to bring bitcoin to the mainstream, and the failure to get approval for their ETF is a big blow to that cause.

Although bitcoin has been around since 2009, it didn’t really become part of public consciousness until 2013, at which point its value skyrocketed from around $ 140 in late October of that year to more than $ 1,100 a month later, according to Coin Desk. But almost as fast as the price shot up, it crashed back down. Since then, it has taken more than three years for bitcoin’s price to make it back to the $ 1,100 mark, finally reaching it in January.

One bitcoin currently trades for $ 1,047, down from $ 1,258 before the SEC’s ruling. Large price swings in short time frames like that have happened frequently in bitcoin’s past, and that volatility was another reason the SEC declined to accept the Winklevoss ETF. Unlike other currencies such as the U.S. dollar or the Euro, whose values change incrementally and in a fairly predictable fashion, price fluctuations in bitcoin can be absolutely monstrous and it isn’t always obvious what is making the price move.

One thing to note is that even though Bats will appeal the decision, there is no guarantee that the SEC even has to act on it in any way, let alone actually reconsider its choice. But if the ETF is approved, it would likely move bitcoin from being seen as a curiosity on Wall Street to being something investors see as worth legitimate attention for the first time.