Lawyers, execs explain how BitMEX news could help Bitcoin ETF chances

On Thursday, the industry was shocked by the news that leading Bitcoin derivatives exchange BitMEX was formally charged by the U.S. Commodities and Futures Trading Commission over concerns around derivatives and anti-money laundering violations.

Making up over a billion dollars of volume a day, this news was notable for the entire Bitcoin market.

Some fear that the crackdown on BitMEX is the start of a wider attack on unregulated/semi-regulated trading platforms.

Fund managers, analysts, and lawyers say that the news may actually boost the chances that Bitcoin gets its own regulated exchange-traded fund, which could draw in a vast amount of capital.

How the BitMEX news could boost Bitcoin ETF chances.

Travis Kling, the co-founder of crypto-focused fund Ikigai Asset Management, recently said that the legal action against BitMEX increases the likelihood of a Bitcoin exchange-traded fund seeing approval by the Securities and Exchange Commission.

"Look you can hate this or love this. I'm just stating the facts. SEC pushed back against an ETF specifically for price manipulation on unregulated exchanges. BitMEX was the poster child for this. So to the extent BitMEX goes away or its role is diminished, an ETF is more likely."

The legal action taken against BitMEX today is undoubtedly a major step in the right direction of receiving approval for a #Bitcoin ETF. - Travis Kling October 1, 2020.

He added that he expects other firms with "Big BTC volume" to join BitMEX in terms of being regulated before the SEC "Signs off on an ETF.".

Thomas Lee, a co-founder of Fundstrat and a long-time crypto analyst, is not sure that Bitcoin is at a point where it can feasibly sustain an ETF. He said at a Singapore conference in 2019 that until the cryptocurrency reaches a price of $150,000 or more, the market cannot sustain an ETF. He explained that in its current state, there isn't enough supply to fill market demand.