Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

sec.gov

Post reply on HN
Print view View original

191–200 of 357 posts

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

#191

Post by kirse »

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…

So what are the expected benefits of a bitcoin ETF?

The expected benefit is that the Winklevoss twins can now cash-out the $11m+ of Bitcoins [1] on the backs of public sucke-... I mean investors.

There's not really any other immediate purpose for this ETF other than that, they've been working to build trust (a currency's only source of value) in Bitcoin for years now in order to add value to their own holdings; they will likely continue to resubmit the proposal [2] until they figure out a way to weasel things through. An ETF would be the ultimate stamp of trust and approval -- having the US gov't essentially validate Bitcoin via SEC approval means that $11m could easily turn into half a billion or more.

[1] https://www.washingtonpost.com/news/the-switch/wp/2013/11/09...

[2] https://www.forbes.com/sites/laurashin/2017/03/10/sec-reject...

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

#192

Post by srssays »

bogomipz wrote: post #159
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.

I am not sure why you put the word currency in quotes. There have also been many state issued currencies that have done similar - see Thai Baht, Argentine Peso, Russian Ruble, Venezuelan Bolivar etc.

Pound sterling...

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

#194

Post by leakybit »

bbcbasic wrote: post #143
iaw wrote: post #117

Earlier quoted context omitted.

When the Winklevoss twins became aware of BTC (or at least shortly after they started talking about it publicly), some classic market manipulation ploys began appearing. It could be coincidental, but I've always been suspicious that the Winklevoss twins were the first people of a mind and with the capital to start gaming the BTC market as one can any other financial institution. The Winklevii are not people I'd like…

> some classic market manipulation ploys began appearing Cryptocoin markets are a haven for scams and manipulations. When I was into it I was hearing of a new scam almost every week. I don't think there is any correlation with Winklevoss let alone causation. Unless you have some evidence or references to present?

So I guess it's no different than the stock market.

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

#195

Post by jon_richards »

thescriptkiddie wrote: post #174
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.

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 va…

>investments like loans, which won't evaporate if hyperinflation occurs.

Loans absolutely will evaporate if hyperinflation occurs. Lets say you give a $1000 loan that pays out $2000 after two years and the value of the dollar drops 50% over the first year. You will still get $2000 in 1 year. Assuming the value of the dollar holds, you won't have made an actual profit. But what if the value of the dollar continues to drop? If you think its going to drop another 50%, you'd be better off selling your loan for $1000 now, in which case you've already lost half your value, assuming you can find a buyer.

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

#196

Post by slg »

askmike wrote: post #189
slg wrote: post #173

Earlier quoted context omitted.

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.

While technically nothing changed, the SEC approving an ETF directly tied to bitcoin would have changed how Bitcoin is perceived by a lot of people. > Nothing about the currency actually changed. You can say this about about everything: "while nothing about the pound changed, brexit caused the price to go down."

Brexit had real world impact on how the currency would be used in the future and the strength of the economy of the country that stands behind it. The SEC decision does none of that.

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

#197

Post by ajmurmann »

sanswork wrote: post #182
drcross wrote: post #167

Earlier quoted context omitted.

There were capital controls restricting more than 100 euro worth of withdrawals from banks per day. Sure it's not helping you if you are buying a coffee but if it's saving parts of your pension that you worked your whole life to earn then it becomes very important.

This is a non-answer. >There were capital controls restricting more than 100 euro worth of withdrawals from banks per day. Yes and bitcoin didn't help this since the ways to get cash for your bitcoin involved international transfers which exposed you to those restrictions. >Sure it's not helping you if you are buying a coffee but if it's saving parts of your pension that you worked your whole life to earn then it bec…

Not the parent, but what's going on right now in Venezuela speaks to this nicely: http://www.econtalk.org/archives/2017/02/turning_sociali.htm...

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

#198

Post by sanswork »

ajmurmann wrote: post #197
sanswork wrote: post #182

Earlier quoted context omitted.

This is a non-answer. >There were capital controls restricting more than 100 euro worth of withdrawals from banks per day. Yes and bitcoin didn't help this since the ways to get cash for your bitcoin involved international transfers which exposed you to those restrictions. >Sure it's not helping you if you are buying a coffee but if it's saving parts of your pension that you worked your whole life to earn then it bec…

Not the parent, but what's going on right now in Venezuela speaks to this nicely: http://www.econtalk.org/archives/2017/02/turning_sociali.htm...

First up the government there have already started arresting the mining operators so probably no longer looking like that wise of an investment on their parts.

Other than that it's a much safer bet in Venezuela to buy USD than bitcoin though and that is generally what happens.

If you're poor in a country with a government like the Venezuelan one betting your limited funds on a speculative investment that requires an active internet connection to use doesn't seem wise or helpful.

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

#199

Post by branchless »

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…

How was their capital destruction? People can buy in at a lower price. It's a zero sum game.

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

#200

Post by mahyarm »

twic wrote: post #71
mahyarm wrote: post #26

So if you have a rare-earth metal commodity ETF that can be dug from the ground in conflict areas and have exchange markets in these wild areas, would the SEC deny that commodity ETF then because they wouldn't have surveillance-sharing agreements with those markets?

Why would the exchanges be in the areas where the metal is mined? The London Metal Exchange seems to do pretty well despite the scandalous lack of zinc mines or steel mills inside the M25.

In this hypothetical situation, lets say it's because the countries that the occur in want a cut of the proceeds, so they force the sale of these metals to be in their country.

And instead of rare earth metals, lets say it's iron? Something that is mineable almost anywhere, kind of like bitcoin. So you would have exchanges with these agreements, but you would also have exchanges without the agreements.

Post reply on HN