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Bitcoin slides below $8,000 after the SEC rejects the Winklevoss twins' bitcoin fund


Bitcoin continued to slide Friday morning after the Securities and Exchange Commission for a second time rejected a proposal by Cameron and Tyler Winklevoss to list an exchange-traded fund tied to the cryptocurrency. 

At 8:56 a.m. ET, the red-hot coin was trading down 1.35% at $7,840. It has shed hundred of dollars since news broke Thursday night that the SEC had once again said it didn't think the fund was ready for its debut. The agency originally rejected the fund in March 2017. 

This time regulators said the underlying bitcoin market, on which the fund would be based, is too susceptible to manipulation, noting: "BZX has not demonstrated that the structure of the spot market for bitcoin is uniquely resistant to manipulation."

The news dampened hopes the agency would soon approve a bitcoin fund, which had been fueling a recent rally across the market for digital currencies. 

Still, there are other funds seeking approval with different structures. Elsewhere in the market, VanEck and SolidX filed a request for an ETF based on bitcoin futures. And California asset manager Bitwise asked for permission to list an ETF tied to 10 cryptos earlier this week. 

And one SEC commissioner stood up against the decision. Hester Pierce, a republican, said the rejected fund would have helped make the market more mature.

“More institutional participation would ameliorate many of the Commission’s concerns with the bitcoin market that underlie its disapproval order," Peirce said. 

Bitcoin enthusiasts welcomed Peirce’s comments with open-arms.

"We think Commissioner Peirce's dissent is worth noting, and we remain optimistic about the progress being made in the space," Hunter Horsley, founder of Bitwise, said. "We look forward to having our own discussions with the SEC about the nature of our own proposed offering." 

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