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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]

#171

Post by slg »

cestith wrote: post #161
Analemma_ wrote: post #129

Earlier quoted context omitted.

The SEC declining to approve some investment vehicle is not unusual at all. Compare that to the USD, where nothing short of global nuclear war is going to cause a 10-minute 25% swing.

On 2001-09-11 gasoline tripled, food doubled, and bottled water as much as quadrupled or quintupled in dollar pricing in parts of the US in less than a day. Yes, there were in fact $4/gallon, $5/gallon, and even $8/gallon gasoline and diesel prices posted, many by noon. This also increased the price of everything shipped by truck for a while, too. Prices came off that peak quickly, but took months to years to revert…

Gas prices actually dropped in the months after 9/11 [1]. Any place that was charging $8 per gallon day of was guilty of price gouging. Either way, you are comparing an SEC decision to the aftermath of the largest terrorist attack in history. Don't you think the scale of these two events is a little different?

[1] - https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=E...

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

#173

Post by slg »

baddox wrote: post #89
slg wrote: post #80

Earlier quoted context omitted.

>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.

The only way it reduces its future potential value is by making it harder to speculate on its future potential value. Nothing about the currency actually changed.

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

#174

Post by thescriptkiddie »

Analemma_ wrote: post #100
slg wrote: post #80

Earlier quoted context omitted.

>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.

Yup. Any "currency" that can plummet in value by 25% because of a minor SEC ruling is not ready to be a store of value.

Generally speaking, it's a bad idea to use currency as a store of value. The unwavering stability of the almighty US Dollar is a massive historical outlier. For most of history the wealthy didn't keep Scrooge McDuckian piles of cash around, they converted their cash into hard goods and investments like loans, which won't evaporate if hyperinflation occurs. Even today, the smart thing to do is to store most of your value in liquid and semi-liquid assets.

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

#175

Post by dragonwriter »

thinkloop wrote: post #106
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…

The next step seems to be to create a regulated market - anyone know what that means, or whether there is something inherent to Bitcoin that doesn't allow it? Coinbase has KYC, banking relationships and tax integration, I'm sure that can be extended to an exchange.

> The next step seems to be to create a regulated market - anyone know what that means, or whether there is something inherent to Bitcoin that doesn't allow it?

It means commodity exchanges dealing in Bitcoin regulated by the CFTC or similar entities in other jurisdictions. There are some already, but they do a very small share of Bitcoin volume.

> Coinbase has KYC, banking relationships and tax integration, I'm sure that can be extended to an exchange.

That's money transmitter stuff, which is a different set of regulatory requirements.

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

#176

Post by [deleted] »

SilasX wrote: post #160
Analemma_ wrote: post #104

Earlier quoted context omitted.

function generateBitcoinNewsReaction(oldPrice, newPrice) { if (oldPrice > newPrice) { return "This is good for bitcoin."; } else if (oldPrice

function generateBitcoinSkepticism(oldPrice, newPrice) { if (oldPrice > newPrice) { return "It was a bubble all along."; } else if (oldPrice

[deleted]

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

#178

Post by johnyzee »

This is a pretty big blow.

The ETF has been the talk of the town for the last four years, and it is not unreasonable to think that it has been holding the hand under the price, since to a lot of people it represented the coveted inflow of institutional investment into bitcoin.

With this gone, the immediate outlook for bitcoin is bleak. There is little market adoption to speak of, in fact bitcoin is probably losing market share, as the initial hype and attention grabbing announcements of bitcoin support have died down, and a lot of merchants have decided that the miniscule business it drives is not worth the trouble. Also, the network is straining even under the current load, leading to (much) longer transaction confirmation times and higher fees. The average fee for a bitcoin transaction is now almost one dollar - this rules out a lot of use cases that previously people would have said were ideal for bitcoin.

Which leads me to the even bigger problem: The bitcoin community and ecosystem is in a massive deadlock, between two sides that are equally rabid and antagonistic, and dividing the project down the middle, between the developers and the mining operators. Few outsiders likely know how bad it has become, but visit r/bitcoin and r/btc on reddit if you're curious. This would be concerning in itself for the future of the project, but it also means that right now no major updates can be made to the bitcoin network, because each camp runs a big percentage of the network and block any new initiative from the other side.

All of this makes me very bearish for bitcoin in the medium term. I am very sure that bitcoin has a future, but how long out that is, and how big it is, remains doubtful and could well be influenced negatively by particularly the issue of governance. Satoshi once said something like "in ten years bitcoin is either worth a huge amount or nothing". I'm starting to fear that might not be true - bitcoin could also become a small niche platform for a very limited set of use cases.

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

#179

Post by LoSboccacc »

mrb wrote: post #165
Analemma_ wrote: post #100

Earlier quoted context omitted.

Yup. Any "currency" that can plummet in value by 25% because of a minor SEC ruling is not ready to be a store of value.

You must be unfamiliar with financial markets. Many assets have lost 25% in minutes and still considered perfectly acceptable store of value: stocks, commodities, etc.

Don't forget the euro a couple years ago reached parity with dollars in a couple months and people like ma that were saving to emigrate got thousands dollars in flames.
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