Wow.
From the ruling....
> First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated.
> Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. I'm not sure I entirely understand if they mean that Bitcoin itself must be regulated or just that the SEC needs to see that the major exchanges are regulated.
If its the former, then I think this is game over, if its the later then............hmmm I really don't know.
EDIT Having gone through the ruling it looks like they have a few reservations.
1) Most of the bitcoin trading happens on unregulated markets
2) Most of the volume happends in China and not the us and is therefore hard to regulate.
3) The ETF is tied to the Winklevoss own Gemini exchange which has little volume and often inferior pricing to other more liquid exchanges.
4) They bring up the lack of a liquid futures market, though I'm not sure this is really a concern.
> The Commission has, in past approvals of commodity-trust ETPs, emphasized the importance of surveillance-sharing agreements between the national securities exchange listing and trading the ETP, and significant markets relating to the underlying asset. 144 Such agreements, which are a necessary tool to enable the ETP-listing exchange to detect and deter manipulative conduct, enable the exchange to meet its obligation under Section 6(b)(5) of the Exchange Act to have rules that are designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest
So until bitcoin markets are regulated by the SEC or similar no ETP/ETF products I suppose.
I'm a bit disappointed that there is no ETF but this is pretty darn reasonable.