Weighting of the debate on the ETF SEC approval of Bitcoin


The SEC disapproved several bitcoin ETF proposals last Wednesday. Two of them belonged to ProShares and tracked down futures contracts with bitcoins, and five were inverse and leveraged by Direxion. A GraniteShares ETF proposal was also rejected. The new development comes after the rejection of Winklevoss's ETF in July.

According to published SEC documents describing the reasons for the disapproval, the proposals did not meet the burden of proof in providing sufficient measures against fraud and manipulation. They failed to demonstrate that the bitcoin-futures markets are large enough to withstand manipulation and did not include a large-scale surveillance sharing market linked to Bitcoin.

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And now, according to John Hyland, a veteran of the fund industry traded on the stock exchange, there is little chance that the SEC will approve a bitcoin ETF in the near future. He put the odds of an ETF bitcoin endorsement in 2018 at 20%. Hyland joined Bitwise Asset Management a few months ago to contribute to the development of its ETF. Unlike those already proposed, it would track a group of cryptocurrencies and not limited to Bitcoin.

It is known for the development of the first ETFs related to crude oil, natural gas and copper. Although initially ETFs based on futures felt they had a better chance of obtaining SEC approval, they still have the burden of proving that the market is large enough to support a derivative and resist manipulation.

At present, bitcoin futures markets are falling, with only about $ 18 million in volume traded in a day. According to Hyland, most of the volumes traded are in Asian markets, and this makes them difficult to monitor and regulate, and therefore the situation will continue to be a huge obstacle for cryptocurrency ETFs.

The refusal of the SEC Secco Bitcoin ETF has been corrected [19659008] According to the Morgan Creek founder Digital Assets, Anthony Pompliano, the SEC will finally approve the cryptographic ETFs, but only after having prepared adequate regulatory structures, sufficient to mitigate handling problems.

The analyst said the conditions outlined by the SEC were unlikely to be met in 2018 and that the industry would need to reach a certain level of growth and maturity to be able to meet most of it. . This, he repeated, will certainly require more time.

He also made holes in the argument that a bitcoin ETF would lead to an exponential rise in prices, repeating that although this is likely to be the case, things can easily go other way. Anthony cited the short selling practices and subsequent price contractions that took place nine months ago after the introduction of bitcoin futures, stating that it is an unpredictable market.

The Morgan Creek executive also supported the SEC's decision to reject the bitcoin ETFs, describing the process as procedural and fair. Pompliano stressed that the rejections were based on the lack of sufficient measures to prevent malfunction.

He suggested that the crypto community take note of the recommendations made and implement them accordingly. According to the argument of the pioneer of the ETF, the problem was not the heritage, but the ecosystem built around it.

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