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SEC Rejects Rule Change for Bitcoin Exchange-Traded Fund [pdf]

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Re: SEC Rejects Rule Change for Bitcoin Exchange-Traded Fund [pdf]

#81

Post by jbooth »

EGreg wrote: post #59
chollida1 wrote: post #18

Bitcoin just went from a high of 1327.1926 to 995.9575 in the blink of an eye. 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 unregulat…

I put a 50x leveraged short contract trade 10 mins before that at BitMex, and just before it plummeted, it quickly went up to 1327 and I got wiped out. So I didn't get to make a huge return!

The market can stay irrational longer than.. 10 mins.

Re: SEC Rejects Rule Change for Bitcoin Exchange-Traded Fund [pdf]

#82

Post by [deleted] »

chollida1 wrote: post #18

Bitcoin just went from a high of 1327.1926 to 995.9575 in the blink of an eye. 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 unregulat…

[deleted]

Re: SEC Rejects Rule Change for Bitcoin Exchange-Traded Fund [pdf]

#83

Post by tobltobs »

paulpauper wrote: post #47
ceejayoz wrote: post #38

Earlier quoted context omitted.

As opposed to Bitcoin, where the statement is sometimes along the lines of "lost 30% of its value since 20:13 "?

In 2013, depositors in Bank of Greece lost 50% of their deposits above $100k, overnight, by decree. Not saying Bitcoin is perfect, but the alternatives are often not better.

Wasn't that in Cyprus?

Re: SEC Rejects Rule Change for Bitcoin Exchange-Traded Fund [pdf]

#84

Post by JumpCrisscross »

gregshap wrote: post #66

So what are the expected benefits of a bitcoin ETF? Many of the traditional benefits of ETFs are obsolete when you can just buy and hold an equivalent amount of bitcoin The biggest benefit I can think of is that some institutional investors have restrictions on the types of securities that they can buy. Someone could solve this by creating a company to buy lots of bitcoin, and then having an IPO to list that company…

> institutional investors have restrictions on the types of securities that they can buy

Those restrictions exist for a reason. Trading unregistered things over-the-counter, e.g. private stock or Bitcoin, carries unique risks. One of those is around fraud. Most investment funds aren't equipped to do fraud diligence (and benefit from not having to do it on ETPs).

Re: SEC Rejects Rule Change for Bitcoin Exchange-Traded Fund [pdf]

#85

Post by omouse »

joecool1029 wrote: post #44
chollida1 wrote: post #18

Bitcoin just went from a high of 1327.1926 to 995.9575 in the blink of an eye. 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 unregulat…

So yeah, it looks like this ruling will prevent any commodity linked ETF from being approved without surveillance on a regulated exchange. So that's not likely not gonna happen ever. The ruling kills any other bitcoin/virtual asset ETF from getting approved as well.

without surveillance on a regulated exchange

So we're going to have competition in exchanges, a free market of them with various rules/surveillance levels? Neat!

Re: SEC Rejects Rule Change for Bitcoin Exchange-Traded Fund [pdf]

#88

Post by zeusk »

EGreg wrote: post #59
chollida1 wrote: post #18

Bitcoin just went from a high of 1327.1926 to 995.9575 in the blink of an eye. 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 unregulat…

I put a 50x leveraged short contract trade 10 mins before that at BitMex, and just before it plummeted, it quickly went up to 1327 and I got wiped out. So I didn't get to make a huge return!

> 50x leveraged short contract

This is partly why SEC wants underlying to be regulated.

Re: SEC Rejects Rule Change for Bitcoin Exchange-Traded Fund [pdf]

#89

Post by baddox »

slg wrote: post #80
chollida1 wrote: post #18

Bitcoin just went from a high of 1327.1926 to 995.9575 in the blink of an eye. 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 unregulat…

>Bitcoin just went from a high of 1327.1926 to 995.9575 in the blink of an eye. That is a loss of 25% of its value. This announcement does nothing to hurt the utility of Bitcoin or its application as a medium of exchange. That drop certainly seems like a speculative investment bubble popping.

It clearly reduces some of the potential future value of Bitcoin, and predictions of future value are baked into the current market price. I guess you could consider that under your definition of "speculative investment bubble," but it really applies to any market price of anything.

Re: SEC Rejects Rule Change for Bitcoin Exchange-Traded Fund [pdf]

#90

Post by JumpCrisscross »

hl5 wrote: post #77
chollida1 wrote: post #18

Bitcoin just went from a high of 1327.1926 to 995.9575 in the blink of an eye. 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 unregulat…

It's not reasonable in the sense that the SEC should respond to the level of trader interest in BTC with something other than "don't trade it". The SEC has a three pronged mission: - Protect investors - Maintain fair, orderly, and efficiently markets - Facilitate capital formation With this decision they missed on all three. No investor was protected. The BTC market today was not fair, orderly, or efficient. There wa…

SEC isn't saying "don't trade it". They're saying don't register a security linked to it.

Registration means you're complying with certain laws. Those laws, in turn, make diligence easier for investors. If you remove those baseline expectations, marginal transaction costs go up.

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