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Each ETF needs to be approved by the SEC. You are welcome to submit an application for your restaurant reservations. Historically the SEC has refused these gra

Each ETF needs to be approved by the SEC. You are welcome to submit an application for your restaurant reservations. Historically the SEC has refused these grants for Bitcoin ETFs on the basis that the underlying asset does not have well-established spot markets and credit mechanisms. See for example [1]. Greyscale finally sued the SEC for applying arbitrary and capricious standards, and prevailed in federal court. But even so the SEC has not approved spot bitcoin ETFs (that is, ETFs that "physically" hold Bitcoin) but had only given guidance for cash-settled Bitcoin tracking ETFs. That makes this announcement a very unexpected surprise. [1] https://www.sec.gov/rules/other/2018/34-83723.pdf https://www.sec.gov/rules/other/2018/34-83723.pdf EDIT: And it does in fact appear that this is too good to be true. Looks like there was a brief spike up to $48k from the $46k baseline so somebody made out nicely on this little scam. Also goes to evidence that Bitcoin markets might be a bit too sensitive to manipulation to be suitable for inclusion in an ETF.

altairprime 3y ago
This announcement is not valid, which may allay your surprise somewhat (see above).
derangedHorse 3y ago
> Also goes to evidence that Bitcoin markets might be a bit too sensitive to manipulation to be suitable for inclusion in an ETF I don’t understand how you came to that conclusion. $2k is a relatively small fluctuation. Do you think other securities wouldn’t be subject to the same fluctuations given positive news? If not, there shouldn’t be laws against it like there are now
- andrewla 3y ago
  $2k is ~5%; that's enough in a short enough time to trigger equity market circuit breakers and temporarily pause trading. Bitcoin has no such controls because there is no NMS regulation applied here, which is one of the SEC's fears around allowing Bitcoin ETFs. I generally don't agree with this guidance as it is not universally applied to ETFs that the SEC has allowed historically, but it does buttress their case to a degree. EDIT: bad math; closer to 4% price move -- although the rebound from the spike might break the threshold, current SEC rules use a trailing price band so wouldn't trigger here.
  - derangedHorse 3y ago
    If we're just talking percentage changes, that can already happen with other commodity ETFs. I'll concede to the point that Bitcoin has historically been more volatile and could have a higher frequency of halts, but I personally don't think that should impact the formation of the ETF.
    - andrewla 3y ago
      Violent agreement here, I think -- I also feel that the criteria are being applied arbitrarily and capriciously and we accept many things as ETF members that have far less liquid spot markets than Bitcoin. But incidents like this don't help.

altairprime 3y ago

This announcement is not valid, which may allay your surprise somewhat (see above).

derangedHorse 3y ago

> Also goes to evidence that Bitcoin markets might be a bit too sensitive to manipulation to be suitable for inclusion in an ETF I don’t understand how you came to that conclusion. $2k is a relatively small fluctuation. Do you think other securities wouldn’t be subject to the same fluctuations given positive news? If not, there shouldn’t be laws against it like there are now

andrewla 3y ago
$2k is ~5%; that's enough in a short enough time to trigger equity market circuit breakers and temporarily pause trading. Bitcoin has no such controls because there is no NMS regulation applied here, which is one of the SEC's fears around allowing Bitcoin ETFs. I generally don't agree with this guidance as it is not universally applied to ETFs that the SEC has allowed historically, but it does buttress their case to a degree. EDIT: bad math; closer to 4% price move -- although the rebound from the spike might break the threshold, current SEC rules use a trailing price band so wouldn't trigger here.
- derangedHorse 3y ago
  If we're just talking percentage changes, that can already happen with other commodity ETFs. I'll concede to the point that Bitcoin has historically been more volatile and could have a higher frequency of halts, but I personally don't think that should impact the formation of the ETF.
  - andrewla 3y ago
    Violent agreement here, I think -- I also feel that the criteria are being applied arbitrarily and capriciously and we accept many things as ETF members that have far less liquid spot markets than Bitcoin. But incidents like this don't help.