Bitcoin blow as fund drops US exchange application

NEW YORK: An effort to allow investors to trade digital currencies as easily as stocks in the United States stumbled when the backer of a bitcoin fund said an application to list on an exchange had been withdrawn.

Grayscale Investments LLC said Intercontinental Exchange Inc’s NYSE Arca exchange withdrew a request with the US Securities and Exchange Commission (SEC) to list its Bitcoin Investment Trust, in the latest setback to the digital currency.

“Although digital currency market regulation continues to rapidly evolve, at this time Grayscale does not believe there have been enough regulatory developments to prompt the SEC to approve the ... application,” the fund’s issuers said in a statement. They said they would continue their dialogue with regulators, but could not predict when they may get approved.

The Bitcoin Investment Trust is currently traded ”over the counter” in less formal exchanges than those used for typical stock transactions and at far higher prices than the bitcoin it holds.

On Wednesday, shares closed at US$739.50, while the bitcoin it holds were worth less than US$373, according to the issuer.

The shares are nonetheless trading up 508% this year, more even than the meteoric rise of the digital currency, which JPMorgan Chase & Co CEO Jamie Dimon this month called “a fraud” that will blow up.