SEC and Bitcoin ETF estimationDavid Kemp
The US SEC made 3 gross inaccuracies in generating the reasons why it rejected the claim for registration of bitcoin-ETF. This is the conclusion of David Weisberg, who is the head and founder of CoinRoutes.
The SEC in October again refused to offer NYSE Arca and Bitwise to launch ETF-bitcoin. The Commission said that the product does not comply with US laws regarding market manipulations and other misconducts. Therefore, the regulator again refused to register such products.
Main mistakes in the arguments of the Commission
The expert highlighted such errors:
- High transparency of ETF-bitcoin in comparison with gold, platinum and other precious metals. The spot market for precious metals is negotiable. Such a conclusion can be made if we analyze a large spread in the value of supply and demand. The rate is 4%. In similar markets the value of bitcoin is only 1%.
- A huge number of crypto exchanges that fully meet the requirements of the regulator. Absence of proven "inappropriate and fake economic activity" on cryptocurrency exchanges. According to Weisberg, cryptocurrency exchanges provide the necessary liquidity in order to determine the value of an asset during trading.
- Manipulations apply to all assets approved by the SEC. With Bitcoin, it is only probable. The expert pointed to the RICO case - in early autumn, a group of bidders of the precious metal was accused of prolonged manipulation on the futures market.
In general, Weisberg has no doubt that the regulator is biased towards digital money No. 1. As a result, requirements have been set for ETF, that significantly exceed those applicable to other assets.
Bitwise does not give up and prepares another claim for permission to bitcoin-ETF
Bitwise Asset announced plans to file another claim for permission to launch a fund based on ETF-bitcoin. In the article “What is Bitcoin ETF?” there is a detailed information about the features of this asset.
The company emphasized that it appreciates the detailed analysis and parsing of the statement that SEC conducted. The report said: “We look forward to continuing the productive cooperation with the SEC to address difficulties. Our goal is to eliminate the problems and to submit the next claim as soon as possible. ”
Bitwise reminded that the use of new exchange products required “many years of regulatory involvement.”
Prior to this, the head of research department Matt Hougan said that he had no doubt in the approval of the ETF. He explained his position by increasing the manageability of the cryptocurrency market. Representatives of Bitwise noted: “Although we were not able to comply with the requirements of the Commission with regard to the window of 240 days established by law, the SEC needs additional arguments. We are satisfied with the achievement of the sphere and progress. There is no doubt that in the end we will be able to resolve the remaining difficulties”.
Bitwise named 3 key signs of markets’ readiness for ETF
Asset Management company tried to convince the US SEC in the readiness of the market to launch bitcoin-ETF. As a result a claim was sent to the Commission, it identified 3 key reasons for the approval of bitcoin-ETF. Bitwise singled out the following:
- Regulated Storage Services
- Effective cryptographic currency spot market
- Futures Market Development
Bitwise has emphasized on the significant growth in the bitcoin spot market over the last couple of years. The company announced that cryptocurrency storage is now completely institutional, more than half of regulated custodians carry out the assets insurance.
The company has shown a significant increase in the regulated futures market. The representatives of company said that on average in August, the volume of futures contracts on bitcoin turned out to be more than 235 million dollars.
Matt Hougan, the head of research at Bitwise, said: “The modern bitcoin market is a bit like the digital money market we saw years ago.”
SEC is ready to revise Bitwise-ETF claim from Bitwise
The commission is ready to consider again the claim for the launch of the bitcoin-ETF, which was submitted by the NYSE Arca platform and Bitwise submitted.
The claim was filed for the first time at the beginning of the year. However, on October 6, the relevant SEC took a negative decision on it. The regulator noted that the proposed product does not meet the requirements that aim to prevent illegal activities and market manipulation.
SEC is ready to review its decision in accordance with internal rules.
For reconsideration of the claim, the Commission is ready to accept comments until December 18, 2020. The decision to reject the bitcoin-ETF is still valid.
VanEck and SolidX withdraw their bitcoin-ETF claims
The battle of the bitcoin industry for the opportunity to launch bitcoin-ETF will not end soon. Many experts consider so. Until recently, VanEck and SolidX had the most chances. They decided to withdraw the claim due to the continued uncertainty of the US SEC.
The US Securities and Exchange Commission is persistent in refusing to register bitcoin-ETF. Readiness to reconsider its decision regarding refusal for Bitwise company. If bitcoin-ETF is approved, institutional investors may enter the market. This means that the cryptocurrency rate will increase sharply. Why not try to capitalize on this? Now, after the exchange rate value is reduced, bitcoin can be purchased on especially favorable terms.
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