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> There are also arguments in favor of Grayscale, mainly because the future price is based on the spot price, so a manipulation on the latter would reflect on t

> There are also arguments in favor of Grayscale, mainly because the future price is based on the spot price, so a manipulation on the latter would reflect on the former To me this is everything. If you can't trust spot, then you can't trust futures because futures price will immediately start moving towards the manipulated spot price. Therefore, in my opinion, this is just a game the SEC is playing for whatever reasons.

smabie 4y ago
crypto futures price often leads spot, not the other way around. However CME crypto futs don't really lead anything.
- nu11ptr 4y ago
  I would agree in most cases that is the way it plays out, but then there is no issue either since SEC trusts futures. In the case of direct spot manipulation, spot would in that case lead futures which would no doubt follow suit to whatever price spot had. Regardless, I'm sure there is much arbitrage between them, so saying one is trustworthy and the other is not, is silly in my opinion. Iow, if there is a problem with one then neither should be allowed, not one or the other.
  - steveBK123 4y ago
    US ETFs are regulated assets trading on regulated exchanges, holding or linked to other regulated assets on regulated exchanges. Regulations all the way down. The whole crypto space has been trying to have it both ways and get the veneer of well regulated assets on regulated exchanges, without having to face any regulation on the spot or spot exchanges themselves. It is akin to me deciding to start an ETF in the US, listed on NYSE, linked to Topps baseball cards which I trade on eBay and hold in a vault in my moms basement. Not gonna fly with the SEC.
JumpCrisscross 4y ago
> if you can't trust spot, then you can't trust futures because futures price will immediately start moving towards the manipulated spot price The problem isn’t solely a manipulated spot price. It’s there being no spot price. If exchanges start diverging, the mechanisms holding the ETF stable collapse or become fraudulently misleading. (For example, if Grayscale references the Gemini price for unit creation/destruction and the Gemini price is double that on Kraken.) This will create havoc in the futures market, too. But the havoc is pushed to the periphery. The contract participants bear the pain. The central clearinghouse will continue creating a value for the future, and that value will port truly to the ETF. That leaves all the central mechanics, from borrow/lend to derivatives and even settlement, unharmed. (If the central clearinghouse halts, then everything halts simultaneously. Totally different from a commodity market.)

smabie 4y ago

crypto futures price often leads spot, not the other way around. However CME crypto futs don't really lead anything.

nu11ptr 4y ago
I would agree in most cases that is the way it plays out, but then there is no issue either since SEC trusts futures. In the case of direct spot manipulation, spot would in that case lead futures which would no doubt follow suit to whatever price spot had. Regardless, I'm sure there is much arbitrage between them, so saying one is trustworthy and the other is not, is silly in my opinion. Iow, if there is a problem with one then neither should be allowed, not one or the other.
- steveBK123 4y ago
  US ETFs are regulated assets trading on regulated exchanges, holding or linked to other regulated assets on regulated exchanges. Regulations all the way down. The whole crypto space has been trying to have it both ways and get the veneer of well regulated assets on regulated exchanges, without having to face any regulation on the spot or spot exchanges themselves. It is akin to me deciding to start an ETF in the US, listed on NYSE, linked to Topps baseball cards which I trade on eBay and hold in a vault in my moms basement. Not gonna fly with the SEC.

JumpCrisscross 4y ago

> if you can't trust spot, then you can't trust futures because futures price will immediately start moving towards the manipulated spot price The problem isn’t solely a manipulated spot price. It’s there being no spot price. If exchanges start diverging, the mechanisms holding the ETF stable collapse or become fraudulently misleading. (For example, if Grayscale references the Gemini price for unit creation/destruction and the Gemini price is double that on Kraken.) This will create havoc in the futures market, too. But the havoc is pushed to the periphery. The contract participants bear the pain. The central clearinghouse will continue creating a value for the future, and that value will port truly to the ETF. That leaves all the central mechanics, from borrow/lend to derivatives and even settlement, unharmed. (If the central clearinghouse halts, then everything halts simultaneously. Totally different from a commodity market.)