Bitcoin price dropped just as the SEC unveiled its decision but managed to recover quickly keeping close to $1,200 barrier.

The four-year struggle of Tyler and Cameron Winklevoss to list an exchange-traded fund based on Bitcoin ended with nothing on Friday when the Securities and Exchange Commission (SEC) denied approval of the first Bitcoin ETF. Regulatory uncertainty and the risk of fraud were cited as the main reasons for the rejection.

The refusal came unexpected as 72% of unbiased advisors believed in Bitcoin ETF approval.

Bitcoin reacted on the exchange rejection immediately. Just as the SEC unveiled its decision, the value of the cryptocurrency dropped to as low as 980%, showing a 35% slump during the day. It then rebounded slightly to more than $1100. As of the moment of writing, Bitcoin price makes up $1,225.

The ruin of Winklevoss’s dreams can mean that Bitcoin’s future may not be in the U.S. Experts in cryptocurrencies suggest that it makes sense to try other ways, such as a filing in Europe for an Undertaking in Collective Investments in Transferable Securities (or UCITS) stamp. That will enable the creation of ETFs that could be traded across the continent and, by proxy, in Asia and Africa. The availability of other loopholes explains why Bitcoin recovered so quickly from its weekend plunge in response to the SEC decision.

UCITS does allow investments in derivatives and alternative assets while it has very strict requirements on diversification. It forbids a fund to have more than 10% of its net assets in securities from a single issuer. Thus, it will be almost impossible for Bitcoin vehicle to get UCITS approval.

By no means we want to say that Bitcoin has no future with retail investors. There are more chances that UCITS will approve a fund that invests in two or three digital currencies and maybe European and U.S. government bonds. That will also allow making the fund safer – the point of the diversification requirement.

On the other hand, a different approach can be taken. Indeed, the SEC hasn’t really recognized Bitcoin as an asset class that it can monitor and control. However, this is something that the Internal Revenue Service did a while ago. They enabled providers of private pension plans to allow users funding their accounts in Bitcoin. And average U.S. investors can legally put their retirement money into the digital currency and use that to invest in traditional funds if they are not allowed to bet on Bitcoin using an exchange-traded fund.

The time has come for Bitcoin enthusiasts to think outside the box a bit more.

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