SEC’s Recent Bitcoin ETF Proposal Meeting
On November 28, the U.S. Securities and Exchange Commission (SEC) released a memo detailing the latest discussions surrounding a Bitcoin (BTC) exchange-traded fund (ETF) application. This proposal was introduced by VanEck, a U.S. investment firm, in partnership with blockchain services company SolidX.
Key Players in the Meeting
Representatives from VanEck and SolidX, along with members from the Chicago Board Options Exchange (CBOE), gathered to share insights with various SEC divisions. These included the Division of Corporation Finance, the Division of Trading and Markets, the Division of Economic and Risk Analysis, and the Office of General Counsel on November 26.
History of the Proposal
This is not a new venture; the two companies initially teamed up back in June 2018 to propose a physically-backed Bitcoin ETF for listing on CBOE’s BZX Equities Exchange. However, the waiting game continues as the SEC postponed making a decision back in August, leaving stakeholders on the edge of their seats.
Comparing Bitcoin to Traditional Commodities
A substantial focus of the discussion revolved around comparing Bitcoin to established commodities like crude oil, silver, and gold — assets that already boast ETFs. The presentation argued that just like gold and silver, Bitcoin acts as a “money substitute” rather than a “pure industrial commodity.” This sets Bitcoin in a unique category among traditional market players.
Market Manipulation Resistance Claims
Perhaps the most intriguing part of the presentation was the assertion that Bitcoin is less prone to market manipulation compared to its more traditional ETF counterparts. VanEck-SolidX representatives cited that unlike physical commodities, Bitcoin isn’t influenced by “inside information” such as supply discoveries or disruptions in production. They argue that this characteristic fortifies Bitcoin’s integrity in a trading environment.
Additional examples included the observation that Bitcoin trading is less concentrated in specific exchanges, compelling arbitrage traders to distribute their funds across various platforms. This distribution minimizes the likelihood of price manipulation, as arbitragers need to act efficiently and swiftly.
Looking Ahead: New Partnerships and Products
The stakes are getting higher. Recently, VanEck announced its partnership with Nasdaq to launch a series of “transparent, regulated and surveilled” digital asset products, starting with a Bitcoin futures contract expected to hit the market as soon as Q1 2019. This development could further solidify Bitcoin’s legitimacy within financial markets.
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